Netherlands base oils/lube output falls

The Netherlands’ base oils and lube output fell in May to its lowest since 2020, coinciding with a seasonal rise in European lube demand.

Base oils and lube output of 17,000t in May fell from 81,000t the previous month, government data showed.

Output had averaged more than 93,000 t/month over the previous 12 months.

The slump in production cut total output to 316,000t in the first five months of the year. The volume was down 37pc from almost 500,000t during the same period last year.

Base oils output typically falls sharply like that because of scheduled or unexpected plant-related issues such as maintenance work or run cuts.

The drop in output coincided with a seasonal rise in European lube demand.

Many blenders were also seeking more premium-grade base oils because of unexpectedly tight supplies and high prices for Group I base oils.

The Netherlands is a key source of Group II base oils.

Regional base oils prices rose in response to the tight supply. But their premium to crude and diesel remained much lower than year-earlier levels.

The more muted price strength suggested supply was less tight and demand weaker than year-earlier levels.

Supply of premium grades got a boost from a sustained surge in base oil shipments from the US to Europe.

Supply of Group III base oils was also more plentiful because of a lighter round of plant maintenance work in Europe compared with the same time last year.