US base oils exports to Europe rose to a four-month high in January, sustaining supplies of premium-grade base oils at healthy levels during the first quarter of the year.Total exports of 410,000 barrels (58,000 tonnes) to Europe in January rose from less than 350,000 barrels the previous month and by 4% from year-earlier levels, government data showed..The volume was slightly higher than typical export levels of around 405,000 barrels/month in 2024.The pick-up in shipments added to higher-than-usual Group II base oils supply in Europe late last year, mostly because of high regional output of the premium-grade product.The rise in US shipments early this year, and a likely extension of firm regional output, raised the prospect of Europe’s Group II base oils supply staying at healthy levels during the first quarter of the year.Healthy availability of supply would contrast with a sharp dip in Europe’s Group II base oils supply in first-half 2024 because of plant maintenance work in the Netherlands.Healthy availability of supply also contrasted with signs of more limited surplus volumes of Group I base oils in Europe in the first quarter of the year.The more manageable Group I base oils supply helped to balance out the impact of a seasonal slowdown in regional demand at the start of the year and supported an earlier-than-usual recovery in base oils margins.The premium of Europe’s Group II base oils prices over vacuum gasoil also recovered earlier this year and maintained a firm premium to Group I base oils.US base oils exports to Europe rose in January even with a less attractive arbitrage to move surplus supplies to the region compared with the same period a year earlier.The pick-up in shipments could instead reflect moves to build inventories in Europe ahead of the shutdown of a key Group II base oils unit in the US at the end of the first quarter of the year.The unit is a key source of Group II base oils for the European market..US’ Jan base oils exports hold steady.Netherlands’ Dec base oils output rises.Global base oils arb outlook: Week of 10 March
