Netherlands’ April production improves

The Netherlands’ base oils and lube production recovered in April from a 16-month low in March but remained lower than usual.

The country’s supply remained elevated only because of the extension of an unusual surge in base oil and lube imports for a second month.

Base oils and lube output of 81,000t in April rose from 63,000t the previous month, government data showed. The volume remained below its more typical levels of around 95,000 t/month over the past year.

The lower output since the start of the year has cut the Netherlands’ total output to 299,000t in the first four months of the year. The volume was down 23pc from 386,000t during the same period last year.

The drop in production has coincided with a slump in regional output this year from key sources like Italy and a drop in supplies of Russian origin.

The combination has left base oil supply in the European market unexpectedly tight. Group I and Group II prices have surged in response, climbing to levels that have opened the arbitrage from Asia-Pacific especially.

A rise in the Netherlands’ base oil and lube imports countered the drop in production. The shipments also absorbed supplies that would otherwise have moved elsewhere.

Imports of 312,000t in April slid from 403,000t the previous month. The April volume was still the second highest in at least nine years.