Europe Aug Group III imports from Mideast Gulf rise

Europe’s Group III base oils imports from the Mideast Gulf rose in August for the first time in six months to their highest in more than six years.

The rise in supplies coincided with a seasonal slowdown in regional demand.

Base oils imports from UAE and Bahrain combined rose to more than 41,000t in August, government data showed. The volume was up from 20,890t in July, which was itself a four-month high.

Both Bahrain and UAE are home to Group III base oil units.

The surge in imports lifted total shipments from the two countries to 171,570t in the first eight months of the year. The volume was 22pc lower than year-earlier levels of 219,330t.

Imports had been more than 33pc lower than year-earlier levels in the first half of the year.

Europe's base oils imports from Qatar also jumped in August to a 21-month high of more than 52,000t.

Including those shipments, Europe’s imports of more than 93,000t of premium-grade base oils in August almost doubled from year-earlier levels to the highest in more than six years.

The surge in supplies of premium-grade base oils from the Mideast Gulf coincided with a seasonal slowdown in European lube demand.

Falling base oils prices and slowing economic growth compounded the slowdown.

The weaker demand preceded an expected drop in Group III base oils supplies from several refineries in the third quarter of the year because of scheduled plant maintenance work.

A Group III unit in the Mideast Gulf underwent maintenance work starting in August. A unit in northern Europe underwent maintenance work later in the third quarter of the year.

Some producers boost shipments ahead of planned shutdowns to enable term buyers to cover their requirements during the maintenance work.

Europe’s Group III base oils prices fell during the third quarter of the year. But the price-drop was smaller than the fall in Group I base oils prices during the same period.

The trend supported a recovery in the Group III premium to Group I prices. The premium had fallen at the start of the third quarter to its narrowest in more than a year.

The rise in shipments to Europe in August curbed availability for other markets.

US Group III base oils imports fell in August mostly because of a slump in shipments from the UAE.