US base oils exports to Europe rose to an eight-month high in May, at the same time as plant-maintenance work curbed regional supply of Group I and Group III base oils.The pick-up in shipments of premium-grade base oils from the US likely added to firm Group II base oils output in Europe.The rise in supply magnified the contrast in availability compared with Group I and Group III base oils.Europe’s Group II base oils price-differentials strengthened versus other regions and other base oils grades in the second quarter even with the more plentiful supply.The dynamic could reflect stronger demand for Group II base oils in response to tighter availability of other grades.It could conversely point to a divergence between prices and supply-demand fundamentals.US base oils exports to Europe came to 488,500 barrels (69,000 tonnes) in May, government data showed..The volume broke out of a 380,000-422,000 barrels/month range during the first four months of the year and climbed to the highest since last September.Base oils exports to Europe rose in May despite still-lower-than-usual shipments from the districts of San Francisco and Mobile, Alabama.The two districts typically account for more than 70% of US base oils exports to Europe, with the volume likely consisting mostly of term supplies.Lower exports from those districts in the three months to May coincided with scheduled plant-maintenance work on a key Group II base oils unit in the US. Base oils exports to Europe instead rose because of a jump in combined shipments from the districts of Houston-Galveston and New Orleans to a thirteen-month high.The pick-up in shipments from those districts coincided with a rise in the premium of Europe’s Group II base oils price over US domestic prices.The price-premium extended its rise into early-July to a four-year high for heavy grades and close to a more-than-two-year high for light-grade base oils.The widening premium boosted the attraction of moving more arbitrage shipments to Europe..US’ May base oils exports rise.US’ May base oils imports fall.Netherlands’ April base oils output rises
