Europe August supply exceeds demand

Europe’s Group I, Group II and Group III base oils supply combined rose to a one-year high in August amid a simultaneous pick-up in supply of all grades.

Total supply rose to more than 520,000 tonnes in August, government data showed.

The volume rose from close to 480,000 tonnes during each of the previous three months to the highest in a year.

The rise in supply contrasted with a slowdown in Europe’s base oils exports to markets outside the region to an eleven-month low in August.

The region’s lube demand also saw a typical sharp seasonal dip in August from the previous month.

Rising supply and lower regional and overseas demand duly triggered a surge in Europe’s supply-surplus to more than 210,000 tonnes in August.

The volume rose from less than 100,000 tonnes in each of the previous two months to the highest level in four years.

The dynamic highlighted the speed of a supply-build in the face of firm output, lower regional consumption and more limited arbitrage opportunities to clear surplus volumes in overseas markets.