US base oils exports to South America stayed lower than usual in February even as they recovered to a three-month high.The sustained slowdown in shipments coincided with a dip in the region’s base oils output, raising the prospect of tightening supply.A drop in supply would follow signs of balanced-to-tight supply-demand fundamentals in the region late last year and early this year.Lower supply, especially with the lack of any large surplus volumes to clear, raised the prospect of increasingly tight availability or of a more marked slowdown in regional demand.US base oils exports of more than 405,000 barrels (57,000 tonnes) to South America in February rose from close to 370,000 barrels the previous month, government data showed..Exports still fell by more than 20% and for the fifth time in six months from year-earlier levels.The sustained slowdown in exports contrasted with unusually high US shipments to markets like Mexico and West Africa in recent months, and to India and the Middle East in February.It also contrasted with relatively steady flows to Europe in recent months. The rise in US shipments to markets like India pointed to moves to clear surplus volumes.The steady flows to Europe pointed to moves to maintain relatively balanced volumes in a market with higher Group II base oils output this year compared with early last year.US shipments to South America by contrast extended their fall in February despite the availability of surplus US volumes to clear and the drop in base oils output in markets like Brazil.Any slowdown in demand in South America could be one factor supporting lower shipments to the region.Such a trend would put more pressure on US base oils exports to target other markets instead.It would also require US base oils export prices to hold at levels that keep open the arbitrage to move supplies to those other markets..US’ February base oils exports rise.US’ Feb base oils exports to Europe fall.Brazil’s February base oils supply falls
