Europe Aug Group I supply extends rise

Europe’s Group I base oils supply rose to a seven-month high in August as firm output from key sources like Spain and UK coincided with a pick-up in imports.

The rise in supply coincided with a seasonal dip in Europe’s base oils and lube consumption that compounded the subsequent build-up in surplus volumes.

An extension of supply holding at elevated levels in the fourth quarter could trigger a similar dynamic over the coming months as demand faces a seasonal slowdown at the end of the year.

Europe’s total Group I base oils supply, or regional output and imports combined, rose to more than 195,000 tonnes in August, government data showed.

The volume rose from already-firm levels of more than 190,000 tonnes during each of the previous two months to the highest since January.

The rise in supply, and seasonal slowdown in demand, increased the importance of a pick-up in exports to limit a build-up of surplus volumes.

Europe’s Group I exports to markets outside the region instead fell to a three-month low in August.

The volume would have been even lower but for a pick-up in shipments to southeast Asia.

Europe’s supply, less exports, duly rose in August to the highest since September 2024.

Europe’s supply of Group II and Group III base oils also rose in August.

But prices for the premium-grade supplies held firm relative to feedstock prices and rose relative to Group I prices.

The firmer prices suggested that the rise in supply and slowdown in demand had a larger impact on Group I base oils than on the other grades.