US base oils and lube output fell in October to its second lowest level in the last twenty months, extending for a third month a period of unusually low production.

Output stayed low amid protracted plant maintenance work throughout the second half of the year.

Firm diesel prices relative to crude added to refiners’ incentive to maximise production of middle distillates.

The drop in output limited the volume of surplus base oils supplies at a time of year when lube consumption typically slows and refiners and blenders seek to trim inventories before year-end.

Base oils and lube output of 4.41mn bl (622,000t) in October fell by 5pc from 4.64mn bl in September and for a seventh month from year-earlier levels, according to the EIA.

The drop in production cut total US output to 48.19mn bl in the first ten months of the year. The volume was down 6pc from 51.12mn bl during the same period a year earlier.

Output slumped in October even as naphthenic base oils production rose from September to a four-month high.

The slowdown reflected instead a 16pc fall in paraffinic base oils output, mostly because of a slump in production in the Texas Gulf coast refining district.

The district’s output of 976,000bl in October fell from 1.42mn bl the previous month and from typical levels of close to 1.60mn bl/month over the previous year.

The volume was the lowest since February 2021, when an arctic storm forced the unexpected shutdown of a swathe of refining capacity in the US Gulf coast region.

The lower output likely mostly reflected the impact of plant maintenance work in the Texas Gulf coast region during the month of October.

The sustained drop in production during the three months to October came at a time of year when US Gulf coast refiners have frequently faced weather-related disruptions during the Atlantic hurricane season.

Any such disruption during that time would have compounded the drop in supply.

Last year’s hurricane season was instead unusually quiet.

The US market still faced a build-up of surplus supplies and pressure on spot prices during the final weeks of last year.

But the volume of the surplus and the pressure on prices was more limited than usual.

US refiners avoided cutting Group I or Group II posted prices during the fourth quarter of the year, even with the weaker supply-demand fundamentals.