US base oils exports to Europe rebounded in June to their second-highest level in more than two years.The rise in shipments raised the prospect of adding to Europe’s premium-grade base oils supplies during the third quarter of the year, when demand faced a seasonal slowdown.US base oils exports of more than 735,000 barrels (104,000 tonnes) in June rebounded from around 280,000 barrels the previous month, government data showed.The June volume was the highest since last November and lifted total exports to 1.63 million barrels in the second quarter, up from 1.07 million barrels in the first three months of the year.The lower volumes at the start of the year coincided with a drop in Europe’s Group II base oils output because of plant maintenance work that began in February.The region’s Group II supply duly fell in March and April to the lowest levels in more than five years.Lower supply coincided with a rise in Europe’s Group II base oil prices relative to Group I prices in the four months to mid-March.The rebound in US base oil exports to Europe in the second quarter of the year coincided with a recovery in the region's Group II output following the completion of the maintenance work.Europe’s Group II supply rebounded to a twenty-two-month high in May, reflecting the pick-up in output and imports.The rise in supply coincided with a gradual narrowing of Europe’s Group II base oils price premium to Group I prices from the start of the second quarter of the year.The surge in US base oil exports to Europe in June raised the prospect of Group II supply in the region staying higher well into the third quarter of the year.Higher supplies would coincide with a seasonal slowdown in demand during the third quarter. It would also give blenders the leverage to maintain lower inventories and to procure additional volumes as and when required.Higher supplies would also provide a buffer against any unexpected disruptions or delays to shipments from the US during the Atlantic hurricane season.The most active period of the hurricane season typically occurs from around mid-August through September..US’ June base oils/lube exports rise
