US base oils and lube supply surged to a seven-month high in December on the back of a simultaneous rebound in output and imports.Supply rose at a time of year when domestic demand typically faces a seasonal slowdown.Output got a boost following the completion of plant maintenance work earlier in the fourth quarter of the year.Higher output also coincided with increasingly firm base oil margins.US domestic base oils prices rose strongly versus feedstock prices in October and November, ICIS data showed.Base oils and lubricants output of 5.03mn bl (709,000t) in December rose by 7pc from year-earlier levels, government data showed. The volume was the highest since last May.Output had previously fallen in nine of the last ten months to November.The lower output throughout most of the year partially cushioned the impact of unusually weak US demand.The higher output in December raised the prospect of magnifying the impact of weak demand.US supply got a further boost from a pick-up in base oils imports in December.Shipments of 1.49mn bl were the highest in eight months.The increase mostly reflected a surge in supplies from South Korea.The US remained a more attractive outlet for overseas supplies of Group III base oils in view of the country’s increasingly higher prices for the product compared with other markets like Europe.Total US supply, or domestic output and imports combined, duly rose to 6.53mn bl in December.The volume rose from 5.60mn bl the previous month to the highest since May and second-highest in fourteen months.The 3pc rise in supply in December also contrasted with a 6pc fall in total US supply to 70.74mn bl in 2023..US’ November base oils supply falls.S Korea's Jan exports rise to Europe, fall to US
