Europe’s Group III base oils supply fell in January to the lowest in more than three years amid a slump in shipments from the Mideast Gulf.Shipments from Asia stayed lower than usual, adding to the slowdown. Shipments from Spain also fell from the previous month.Europe’s total Group III supply of less than 100,000t in January fell from more than 150,000t the previous month, government data showed.The volume fell by 40pc from year-earlier levels to the lowest since mid-2020.Europe’s Group III base oils prices remained under pressure so far this year even with the drop in supply.The price weakness reflected a seasonal slowdown in demand at the start of the year. The slowdown compounded a sustained fall in the region’s lube consumption throughout the past year.The premium of Europe Group III 4cst (low) prices over vacuum gasoil extended its fall in the first two months of the year to the lowest since mid-2022, ICIS data showed.The price-weakness contrasted with unusually strong Group III prices in early 2023 even as supply surged.Prices extended their rise relative to VGO, relative to other base oil grades and relative to prices in other regions during the first few months of last year.The build-up of surplus supplies during that period compounded the subsequent price-weakness from the second quarter of the year onwards.Lower supplies at the start of this year raised the prospect of avoiding a repeat of last year’s build-up of surplus volumes.The lower supply coincided with some signs of more stable prices.The premium of Group III prices over Group I and Group II prices steadied from the start of the year. The steadier price levels contrasted with the sharp fall in the Group III price premium to other base oil grades throughout the second half of 2023.Europe's Group III base oils imports from the Mideast Gulf also faced the prospect of ongoing disruption over the coming months as shipments seek to avoid the Red Sea region..S Korea's Jan exports rise to Europe, fall to US.Europe’s Grp I market share falls in 2023
