US base oils imports rose in January on the back of a rebound in shipments from the Middle East.US domestic Group III base oils prices held firm so far this year even with the pick-up in imports in January.The dynamic pointed to more balanced supply-demand fundamentals even with the rise in shipments at the start of the year.Total base oils imports of 1.53 million barrels (216,000 tonnes) in January rose from an eighteen-month low of less than 950,000 barrels in December, government data showed.Most of the supplies consisted of Group III base oils and included a sharp recovery in shipments from Qatar. Imports from the Middle East country had almost ground to a halt in December.Even with the recent volatility of monthly shipment volumes, US base oils imports rose strongly in second-half 2024 compared with the first six months of last year.The shipments in January extended the recovery, with imports rising for the fifth time in six months from year-earlier levels..The fall in shipments in first-half 2024 coincided with a sustained slide in US Group III base oils prices relative to vacuum gasoil, relative to Group II base oils, and relative to other regions.The rise in shipments during the second half of last year coincided with steadier and then firmer US Group III base oils price differentials from the fourth quarter of the year.The price strength extended into this year even with the rise in base oils imports in January.The firmer price levels pointed to a dip in Group III base oils supply from other sources or to a pick-up in domestic demand. Last year’s slump in Group III base oils price differentials incentivized such a drop in supply from domestic sources.The premium of Group III base oils prices over Group II base oils bottomed out in October at its lowest in more than eight years.The lower premium compounded the impact of the lost yield from producing Group III base oils instead of Group II base oils.The dynamic boosted the incentive for domestic refiners to switch back to producing more Group II base oils instead of Group III..US’ Jan base oils exports hold steady
US base oils imports rose in January on the back of a rebound in shipments from the Middle East.US domestic Group III base oils prices held firm so far this year even with the pick-up in imports in January.The dynamic pointed to more balanced supply-demand fundamentals even with the rise in shipments at the start of the year.Total base oils imports of 1.53 million barrels (216,000 tonnes) in January rose from an eighteen-month low of less than 950,000 barrels in December, government data showed.Most of the supplies consisted of Group III base oils and included a sharp recovery in shipments from Qatar. Imports from the Middle East country had almost ground to a halt in December.Even with the recent volatility of monthly shipment volumes, US base oils imports rose strongly in second-half 2024 compared with the first six months of last year.The shipments in January extended the recovery, with imports rising for the fifth time in six months from year-earlier levels..The fall in shipments in first-half 2024 coincided with a sustained slide in US Group III base oils prices relative to vacuum gasoil, relative to Group II base oils, and relative to other regions.The rise in shipments during the second half of last year coincided with steadier and then firmer US Group III base oils price differentials from the fourth quarter of the year.The price strength extended into this year even with the rise in base oils imports in January.The firmer price levels pointed to a dip in Group III base oils supply from other sources or to a pick-up in domestic demand. Last year’s slump in Group III base oils price differentials incentivized such a drop in supply from domestic sources.The premium of Group III base oils prices over Group II base oils bottomed out in October at its lowest in more than eight years.The lower premium compounded the impact of the lost yield from producing Group III base oils instead of Group II base oils.The dynamic boosted the incentive for domestic refiners to switch back to producing more Group II base oils instead of Group III..US’ Jan base oils exports hold steady
