US’ October base oils imports fall

US base oils imports fell to a five-month low in October at the same time as exports rose.

Imports of 1.05 million barrels (148,000 tonnes) in October fell from a two-year high of more than 1.80 million barrels the previous month, government data showed.

The drop in imports coincided with scheduled plant maintenance work in October that likely cut US base oils output that month.

A drop in base oils output, combined with higher net exports, raised the prospect of partially reversing a surge in US base oils and lube stocks at the end of the third quarter of the year.

Signs of a pick-up in base oils imports in November could by contrast trigger a further rise in those stocks.

Most of the imports consisted of Group III base oils.

Most US base oils production and exports consisted of Group II base oils.

The dynamic meant unusually high base oils exports this year likely helped to curb any build-up of surplus supplies of Group II base oils especially.

The high exports in turn highlighted US refiners’ ability to manage the size of any surplus Group II supplies and to avoid a large supply-build.

They had less control over the country’s base oils imports.

The arrival of a wave of cargoes from northeast Asia and the Middle East in November raised the prospect of a rebound in imports compared with October.

Any pick-up in imports in November would be at a time of year when already-weak domestic demand faced further pressure from a seasonal dip in consumption at year-end.

Weaker domestic demand in turn magnified the impact of such a rise in shipments.

It raised the prospect of a rise in US base oils stocks in November and of Group III base oils accounting for a growing share of those stocks.