US base oils and lube output edged down in June amid a drop in production in the US West coast region.

The slowdown coincided with firm domestic and overseas base oils demand and contrasted with a sustained rebound in output this time a year ago.

Base oils and lube output of 5.22mn bl (734,790t) in June fell from 5.53mn bl the previous month and by 8pc from year-earlier levels, according to the EIA.

The drop in output left total production at 30.00mn bl in the first half of the year. The volume was up just 2pc from 29.27mn bl during the same period last year.

That period included a slump in production in the first quarter of 2021 after an arctic storm struck the US Gulf coast region in February of that year.

US base oils prices surged to unusually steep premiums to crude and diesel during that time in response to the tight supply.

Base oils prices also rose in the first half of this year. But their premium to crude and diesel remained much lower than year-earlier levels.

Base oils prices faced additional pressure this year from unusually strong diesel prices relative to crude. The trend incentivized US refiners to boost production of middle distillates to tap those firm margins.

In the US Gulf coast region, US diesel and jet fuel production accounted for almost 59pc of total refined products output in June. The share was the second highest in at least 17 years.

Unusually high diesel prices and the more muted rise in base oils prices incentivized refiners to produce sufficient volumes of base oils to cover term requirements only.

The slowdown in US base oils output in June mostly reflected a drop in production of US paraffinic base oils in the US West coast to 167,000bl.

Production fell by more than half from the previous month, cutting second-quarter output to 605,000bl.

The volume was down more than half from 1.22mn bl in the first three months of the year and was the lowest quarterly volume since end-2016.

The drop in output coincided with plant maintenance work in the region.