US base oils supply stayed higher than usual in April even as it edged down from the previous month as rising imports cushioned the impact of lower domestic production.Base oils and lube output of 4.93 million barrels (695,000 tonnes) in April fell from a twenty-one-month high of 5.12 million barrels in March, government data showed.The April volume remained higher than usual even with some plant maintenance work in the US Gulf coast market starting that month.Base oils imports rose to a one-year high in April, cushioning the drop in domestic output.Total supply, or domestic output and imports combined, fell back to 6.43 million barrels in April, down from a seventeen-month high of 6.57 million barrels in March.The firm supply volumes still lagged demand for the seventh time in eight months.US base oils prices were unusually weak during most of that period, before rebounding from end-March and through the second quarter of the year.Supply lagged demand during most of the previous seven months to end-March as high exports balanced out the weakness of domestic consumption.Supply lagged demand in April more because of firmer domestic consumption.Higher US base oils prices in April highlighted the impact of consumption driven by domestic rather than overseas demand.The trend highlighted the attraction and priority for domestic refiners to maximise sales in the domestic market.Increasingly firm US Group II prices relative to Group III prices during the second quarter also reflected the changing composition of US supply.The plant maintenance work in the US Gulf coast in April likely impacted Group II light grades.The US' lower domestic output in April duly cut Group II light-grade volumes as a share of total supply.US base oils imports consisted mostly of Group III base oils.Rising shipments from overseas markets in turn boosted import volumes as a share of total supply to 23% of the total. The share was the highest in five months.Group II light-grade and Group III base oils prices reflected those supply dynamics.The discount of US Group II light-grade prices to US Group III prices shrank in April to its narrowest since the first quarter of 2020. It narrowed even more during the next two months..US’ April base oils/lube demand rises
US base oils supply stayed higher than usual in April even as it edged down from the previous month as rising imports cushioned the impact of lower domestic production.Base oils and lube output of 4.93 million barrels (695,000 tonnes) in April fell from a twenty-one-month high of 5.12 million barrels in March, government data showed.The April volume remained higher than usual even with some plant maintenance work in the US Gulf coast market starting that month.Base oils imports rose to a one-year high in April, cushioning the drop in domestic output.Total supply, or domestic output and imports combined, fell back to 6.43 million barrels in April, down from a seventeen-month high of 6.57 million barrels in March.The firm supply volumes still lagged demand for the seventh time in eight months.US base oils prices were unusually weak during most of that period, before rebounding from end-March and through the second quarter of the year.Supply lagged demand during most of the previous seven months to end-March as high exports balanced out the weakness of domestic consumption.Supply lagged demand in April more because of firmer domestic consumption.Higher US base oils prices in April highlighted the impact of consumption driven by domestic rather than overseas demand.The trend highlighted the attraction and priority for domestic refiners to maximise sales in the domestic market.Increasingly firm US Group II prices relative to Group III prices during the second quarter also reflected the changing composition of US supply.The plant maintenance work in the US Gulf coast in April likely impacted Group II light grades.The US' lower domestic output in April duly cut Group II light-grade volumes as a share of total supply.US base oils imports consisted mostly of Group III base oils.Rising shipments from overseas markets in turn boosted import volumes as a share of total supply to 23% of the total. The share was the highest in five months.Group II light-grade and Group III base oils prices reflected those supply dynamics.The discount of US Group II light-grade prices to US Group III prices shrank in April to its narrowest since the first quarter of 2020. It narrowed even more during the next two months..US’ April base oils/lube demand rises