Europe’s Group II base oils supply improved in January after slipping to a nineteen-month low the previous month.Total supply of more than 120,000 tonnes in January rose from around 100,000 tonnes in December, government and shipping data showed.Supply was still down from average levels of more than 140,000 tonnes/month in 2023 and extended a slowdown in volumes of the premium-grade base oils since the start of the fourth quarter of last year.The lower volumes slowed a build-up of surplus premium-grade supplies in Europe at a time of year when regional demand was seasonally low.They also curbed a supply-build ahead of the shutdown of Europe’s sole virgin Group II base oils unit in February for scheduled maintenance work.The lower supply and subsequent plant maintenance work in February increased Europe’s reliance on Group II base oils from the US to cover more of the region’s requirements.The additional demand made Europe a valuable outlet for US refiners facing large surplus volumes to clear during the first quarter of the year.Europe’s Group II base oils prices maintained an unusually steep premium of more than $380/tonne to US export prices throughout most of the first quarter of the year, ICIS data showed.The wide premium facilitated the shipment of more arbitrage cargoes from the US to Europe.The Europe Group II premium to US prices subsequently narrowed in recent weeks.The trend coincided with signs of tighter surplus supply in the US and the completion of the Group II plant maintenance work in Europe..Netherlands’ January supply improves
