US base oils exports to Europe stayed lower than usual in November even as they recovered from an unusual slump in shipments the previous month.The lower volumes raised the prospect of limiting the size of a build-up of premium-grade base oils supplies in Europe during the final months of last year, when lube consumption faced a seasonal slowdown.Total exports of 304,300 barrels (43,000 tonnes) to Europe in November rose from less than 170,000 barrels the previous month, government data showed.The October volume was the lowest in almost two years.The November volume was higher but still lagged typical levels of around 450,000 barrels/month in the first nine months of the year.Exports fell mostly because of a pause in shipments from the district of San Francisco to Europe for a second month in November.The pause in shipments followed maintenance work at a key base oils unit in California in October. It also contrasted with exports of more than 300,000 barrels/month from San Francisco to Europe in the third quarter of the year.Lower exports to Europe in November coincided with a pick-up in the shipment of surplus supplies from the US to other outlets like West Africa and India.The shipment of surplus shipments to other outlets rather than to Europe raised the prospect of curbing the size of any supply-build, and subsequent pressure on prices, in that market during the final months of the year.The US is Europe’s largest overseas supplier of Group II base oils.Europe’s Group II base oils prices weakened relative to feedstock vacuum gasoil prices during the fourth quarter of the year amid pressure from weaker demand.But they fell less than Group III prices during that period, pointing to relatively firmer fundamentals for the Group II grade.The premium of Europe Group II prices over US export prices also peaked early in the fourth quarter before trending lower.The peak level lagged a much higher premium during the fourth quarter of 2023.The lower premium compared with end-2023 made less attractive the arbitrage to move more shipments from the US to Europe.The region still faced the prospect of rising surplus Group II supplies at year-end, with any extension of the Netherlands’ high base oils output dulling the impact of a slowdown in shipments from the US.The Netherlands’ base oils output already held unusually high in October for a fifth straight month.The country is home to Europe’s sole virgin Group II base oils plant..US’ Nov base oils/lube exports slip.Netherlands’ Oct base oils output rises
US base oils exports to Europe stayed lower than usual in November even as they recovered from an unusual slump in shipments the previous month.The lower volumes raised the prospect of limiting the size of a build-up of premium-grade base oils supplies in Europe during the final months of last year, when lube consumption faced a seasonal slowdown.Total exports of 304,300 barrels (43,000 tonnes) to Europe in November rose from less than 170,000 barrels the previous month, government data showed.The October volume was the lowest in almost two years.The November volume was higher but still lagged typical levels of around 450,000 barrels/month in the first nine months of the year.Exports fell mostly because of a pause in shipments from the district of San Francisco to Europe for a second month in November.The pause in shipments followed maintenance work at a key base oils unit in California in October. It also contrasted with exports of more than 300,000 barrels/month from San Francisco to Europe in the third quarter of the year.Lower exports to Europe in November coincided with a pick-up in the shipment of surplus supplies from the US to other outlets like West Africa and India.The shipment of surplus shipments to other outlets rather than to Europe raised the prospect of curbing the size of any supply-build, and subsequent pressure on prices, in that market during the final months of the year.The US is Europe’s largest overseas supplier of Group II base oils.Europe’s Group II base oils prices weakened relative to feedstock vacuum gasoil prices during the fourth quarter of the year amid pressure from weaker demand.But they fell less than Group III prices during that period, pointing to relatively firmer fundamentals for the Group II grade.The premium of Europe Group II prices over US export prices also peaked early in the fourth quarter before trending lower.The peak level lagged a much higher premium during the fourth quarter of 2023.The lower premium compared with end-2023 made less attractive the arbitrage to move more shipments from the US to Europe.The region still faced the prospect of rising surplus Group II supplies at year-end, with any extension of the Netherlands’ high base oils output dulling the impact of a slowdown in shipments from the US.The Netherlands’ base oils output already held unusually high in October for a fifth straight month.The country is home to Europe’s sole virgin Group II base oils plant..US’ Nov base oils/lube exports slip.Netherlands’ Oct base oils output rises
