Global base oils exports to the Middle East rose to a seven-month high in October on the back of a jump in shipments from the US, Europe and Asia.The simultaneous pick-up in shipments from all three regions pointed to signs of rising surplus supply and moves to clear those volumes by shipping them to outlets like the Middle East.Shipments from Asia to the Middle East extended their rise in November, raising the prospect of extending the pick-up in flows to the region.Total exports of more than 57,000 tonnes to the UAE and Saudi Arabia combined rose from around 30,000 tonnes the previous month, government data showed.The supplies originated from the US, Europe and Asia.The export volume was the highest since March, when a swathe of surplus cargoes moved to the Middle East.The surge in shipments early this year left the region with brimming stocks and triggered a subsequent slowdown in buying interest from the second quarter of the year.The strong pick-up in shipments to the Middle East in the fourth quarter of this year pointed to earlier-than-usual moves to clear surplus supplies from those key source markets.The moves could leave those markets with more balanced supply fundamentals at year-end and early next year.They could also leave the Middle East market with replenished stocks and trigger a subsequent drop in the region’s buying interest early next year.Any such slowdown in demand could have little impact if overseas suppliers’ surplus volume is more manageable.Any such slowdown could be more problematic if surplus volumes reach levels that require additional arbitrage shipments to markets like the Middle East.A further rise in shipments to the Middle East by contrast could leave the region facing its own growing overhang of surplus volumes.Such an outcome remains feasible. US Group II base oils prices slipped to a discount to CFR UAE prices since second-half October, facilitating arbitrage opportunities to the region.In Asia, the discount of FOB NE Asia Group II light-grade prices to CFR UAE prices held at its widest level in more than two months in December..US’ Oct base oils/lube exports rise.Global exports to Middle East fall in September
