US base oils exports to Europe rose to a five-month high in April, coinciding with the restart of the region’s sole Group II base oils unit after maintenance work.US base oils exports to Europe rose to more than 610,000 barrels (86,000 tonnes) in April, government data showed. The volume rose from 481,000 barrels in March and from average shipments of around 473,000 barrels/month over the past year.The rise in shipments from the US and restart of the base oils unit in the Netherlands likely speeded up a recovery in Europe’s Group II base oils supplies in the second quarter of the year.A pick-up in supplies followed a fall in the region’s Group II supply to less than 280,000 tonnes in the first quarter of the year.The volume fell from an already-low 360,000 tonnes during the previous three months to a five-year low, mostly because of the shutdown of the base oils unit in the Netherlands.The tighter supply coincided with a rise in Europe’s Group II base oils price premium to Group I prices in the fourth quarter of last year and first quarter of this year.Europe’s Group II premium to vacuum gasoil prices by contrast trended lower during the first quarter of the year.The trend suggesting that muted demand countered any supply-tightness, leaving fundamentals relatively balanced.The region’s Group II price premium to Group I prices then narrowed during the second quarter of the year, when tighter Group I supply supported firmer outright prices of the grade.The lack of a similar price reaction for outright Group II base oils pointed to improving supply-demand fundamentals, especially compared with Group I base oils.Europe’s increasingly tight structural supply and rising prices for Group I base oils raised the prospect of boosting demand for Group II base oils as an alternative.US refiners were well positioned to take advantage of any such pick-up in the region’s demand for the premium-grade supplies.The additional complication, time and cost of moving Group II shipments from Asia to Europe this year added to the attraction of moving more supplies from the US to the region..US’ April base oils exports rise.US’ April base oils imports mixed
