Global base oils supply climbs to four-year high
Supply rises year-on-year for first time in five months
Supply rises at time of year when demand slows
Global base oils supply climbed in August to the highest level in four years amid a simultaneous rise in output in every key market.
Total supply rose to more than 3.0 million tonnes in August, government data showed.
The volume rose by 10% and for the first time in five months from year-earlier levels.
The last time output exceeded the 3-million-tonne level was in the third quarter of 2021.
The rise in supply in August contrasted with a sustained slowdown in production levels in the Americas and Asia markets especially during the first half of the year.
Tighter supply during that period kept shut the arbitrage from Asia to the Americas and helped to support firm base oils margins.
The supply dynamic began to change from the start of the third quarter as a protracted round of plant-maintenance drew to a close.
The pick-up in supply then gathered pace in August.
Supply could get a further boost in the coming months as new base oils production capacity starts to come online.