Spain’s Group I base oils output fell to a multi-year low in November as plant maintenance work cut production levels.Europe’s Group I base oils supply still edged higher as steady output in markets like the UK and higher production in Italy more than countered the drop in volumes from Spain.Spain’s base oils output of 12,400 tonnes in November fell by almost half from close to 24,000 tonnes the previous month, government data showed.The volume fell below the 20,000 tonne/month level for just the second time in the last three years.A recovery in Italy’s base oils output to a four-month high in November more than countered the slowdown in Spain.Europe’s Group I base oils supply duly held firm at more than 167,000 tonnes in November.The volume edged up from less than 164,000 tonnes the previous month but was up 30% from year-earlier levels.Firm supply volumes coincided with a seasonal slowdown in Europe’s lube demand. A sustained slump in the region’s lube consumption compounded the seasonal slowdown.The dynamic freed up and boosted the importance of moving more surplus Group I supplies to overseas markets to limit the size of a supply-build at year-end.Exports of Group I base oils to markets outside the region duly stayed high in November for a second month.Europe’s remaining Group I supply of less than 90,000 tonnes still rose from October and from year-earlier levels.It was still lower than typical volumes of more than 120,000 tonnes/month in the first ten months of last year.Europe’s Group I base oils prices reflected those mixed yet more manageable supply dynamics.The region’s Group I domestic light and heavy-neutrals price premium to vacuum gasoil trended lower throughout the fourth quarter of the year and early this year to the lowest levels since last April.Europe’s Group I export prices also slipped during the fourth quarter and early this year relative to prices in markets like Middle East and India.The lower domestic and export price levels added to signs of weaker supply-demand fundamentals in Europe.But export prices remained at a premium to prices in those overseas markets. The premium was also much higher than year-earlier levels.The firmer price levels pointed to more muted pressure from surplus supply at the end of last year and early this year..Europe’s Nov Group III supply rises
