US’ May base oils exports rise

US base oils exports rose in May to their second-highest level in four years, helping to cover tight supply in other overseas markets.

Total base oil exports of 2.11mn bl in May rose from 1.85mn bl the previous month, government data showed.

The volume was the second highest since May 2018. The highest volume since then had been in March.

Total exports of 9.71mn bl in the first five months of the year were up 9pc from 8.89mn bl during the same period last year and the highest for that period since 2018.

US base oil exports held at elevated levels even as high diesel prices incentivized US refiners to focus on maximizing output of motor fuels.

The trend, combined with firm domestic base oils demand, had raised concern of tighter availability of supplies for overseas markets.

The concern has so far failed to materialize.

The large export volumes suggested instead that US base oils production has remained at sufficiently firm levels to cover strong domestic and overseas demand, even with high motor fuel prices.

Unusually high US base oil exports have coincided with a relatively light round of plant maintenance so far this year. US refiners have also maintained run rates at unusually high levels.

US base oil prices have also risen sharply in recent months. Prices in other outlets like Europe have risen even more strongly and boosted the attraction of tapping those arbitrage opportunities.