US base oils and lube demand rose to a twenty-two-month high in March as a surge in exports cushioned the impact of still-muted domestic demand.Total demand, or domestic consumption and exports combined, rose to 7.11 million barrels (1.0 million tonnes) in March, government data showed.Exports of 4.76 million barrels accounted for more than 66% of the volume.The size of the rise in exports boosted total demand to a level that outpaced US base oils and lubricants supply in March by the largest volume in nine months.The shortfall of supply versus demand highlighted the importance of exports in preventing a large build-up of surplus supplies.The size of the rise in exports and the subsequent shortfall of supply to demand instead triggered a drop in US base oils and lube stocks to 11.05 million barrels in March.The volume was the lowest in nineteen months.The lower stocks and removal of surplus supplies left the US market better balanced at the start of the second quarter of the year.The removal of a significant supply buffer then magnified the impact of a seasonal pick-up in demand and plant maintenance work during the second quarter of the year.US Group II base oils prices rebounded relative to feedstock prices and relative to prices in other markets so far during the second quarter.The higher prices reflected the tighter fundamentals.The higher prices also complicated arbitrage opportunities to key outlets like Mexico and India.The more limited arbitrage opportunities could trigger a faster recovery in US supplies unless domestic demand rises sharply.The lack of such a development for more than a year magnified the importance of unusually high exports during that period.The lack of such a development in the coming months could in turn boost the need for access to key overseas outlets to maintain high exports..US’ March base oils/lube supply rises
US base oils and lube demand rose to a twenty-two-month high in March as a surge in exports cushioned the impact of still-muted domestic demand.Total demand, or domestic consumption and exports combined, rose to 7.11 million barrels (1.0 million tonnes) in March, government data showed.Exports of 4.76 million barrels accounted for more than 66% of the volume.The size of the rise in exports boosted total demand to a level that outpaced US base oils and lubricants supply in March by the largest volume in nine months.The shortfall of supply versus demand highlighted the importance of exports in preventing a large build-up of surplus supplies.The size of the rise in exports and the subsequent shortfall of supply to demand instead triggered a drop in US base oils and lube stocks to 11.05 million barrels in March.The volume was the lowest in nineteen months.The lower stocks and removal of surplus supplies left the US market better balanced at the start of the second quarter of the year.The removal of a significant supply buffer then magnified the impact of a seasonal pick-up in demand and plant maintenance work during the second quarter of the year.US Group II base oils prices rebounded relative to feedstock prices and relative to prices in other markets so far during the second quarter.The higher prices reflected the tighter fundamentals.The higher prices also complicated arbitrage opportunities to key outlets like Mexico and India.The more limited arbitrage opportunities could trigger a faster recovery in US supplies unless domestic demand rises sharply.The lack of such a development for more than a year magnified the importance of unusually high exports during that period.The lack of such a development in the coming months could in turn boost the need for access to key overseas outlets to maintain high exports..US’ March base oils/lube supply rises