US base oils and lubricants demand was mixed in February as a wave of exports continued to balance out a prolonged slump in domestic consumption.The trend is likely to continue if US base oils output stays high and domestic demand muted.The same dynamic duly showed signs of extending into the second quarter of the year.Domestic base oils and lube consumption of 2.13 million barrels (300,000 tonnes) in February fell by 32% and for a seventh month from year-earlier levels.Demand fell by 19% from January, extending a trend of a seasonal slide in consumption in the month of February from the previous month.The year-on-year drop in consumption was more concerning.It boosted the incentive for US refiners to increase their share of supplies that covered domestic demand at the expense of base oils from overseas markets.Even with such moves, without a recovery in domestic demand, US refiners would continue to need to move large volumes to overseas markets to avoid a build-up of surplus supplies.US base oils export prices would need to stay at levels that sustained refiners’ ability to do that.A sharp fall in US base oils export prices in February facilitated such moves that month.US base oils and lube exports of 3.67 million barrels rose in February by 60% and for a seventh straight month from year-earlier levels.The rise in overseas shipments helped to lift total US demand, or domestic consumption and exports combined, to 5.81 million barrels in February.Total demand rose by 7% from year-earlier levels but still fell from 6.35 million barrels in January.Exports accounted for more than 50% of the total for a twelfth straight month.Demand outpaced total US supply by just 1,000 barrels even with the high export volumes.The trend highlighted the need for a rebound in domestic demand or persistently high exports to avoid a major supply-build..US’ February base oils supply falls.Base Oil News stories and analysis also available on ICIS platform
