US base oils and lube exports fell to a twenty-one month low in July amid a slump in shipments to Mexico.Total base oils and lube exports came to 2.93 million barrels (413,000 tonnes) in July, government data showed..The volume fell from an already-low 3.41 million barrels the previous month to the lowest since October 2023.The slide in exports eroded a key support that helped to clear surplus volumes from the US market and balance out persistently weak domestic demand.Lower exports and weak demand raised the prospect of a faster rise in base oils and lube stocks at the start of the third quarter of the year..Higher stocks would contrast with a fall in base oils and lube inventories during the first five months of the year to a three-year low. Lower stocks during that period curbed pressure on refiners to trim prices to clear lingering supplies.Rising stocks instead raised the prospect of reversing that dynamic.US base oils prices began falling from July, pointing to such a scenario.Base oils and lube exports got support in June from a pick-up in shipments to markets like Mexico and India. The countries are key outlets for shipments of surplus spot supplies.The rise in shipments to those markets helped to cushion the impact of a drop in exports to key outlets for term supplies such as Europe and South America.A drop in exports to India and especially Mexico in July removed that support.Exports of less than 851,000 barrels to Mexico in July fell by almost half from the previous month to the lowest since the beginning of 2023.The fall in shipments to key outlets for spot supplies increased the importance of a pick-up in shipments to term buyers in other markets at a time of year when demand faced a seasonal slowdown.Any such rise in requirements in markets like Europe was insufficient to cover for the slump in exports to Mexico.The dynamic highlighted the importance of Mexico especially in terms of its impact on US exports and the size of its surplus supplies..US June base oil supply exceeds demand.US June base oils/lube exports fall.Base Oil News stories and analysis also available on ICIS platform
