UK’s April base oils/lube output rises

The UK’s base oils and lube output partially recovered in April after almost halting the previous month but remained much lower than usual.

The low production level contrasted with a rise in the country’s diesel and jet fuel output to the highest since end-2019.

Base oils and lube output of 20,650t in April rose from less than 2,000t the previous month, government data showed. Production typically falls to such low levels because of factors like plant maintenance work.

Even with the recovery, output remained below average levels of more than 29,000 t/month in 2021.

The lower production left output of 81,000t in the first four months of the year down 41pc from 114,000t during the same period last year.

This year’s low output coincided with a drop in supplies from other key sources in Europe like Italy and the Netherlands. A slowdown in shipments of Russian origin has added to the tightness.

Regional base oil prices have risen strongly in recent months in response to the tight supply.

Middle distillate prices have risen even more strongly relative to crude prices, also in response to tight supply.

The unusually strong diesel prices have incentivized refiners to produce more middle distillates, even when regional base oil supply was tight.

The UK’s diesel and jet fuel output rose in April by 20pc from the previous month to the highest since December 2019.

Their share of the UK’s oil products output rose in April to 36pc of the total. The share was up from 30pc the previous month and the highest since mid-2019.

Base oils and lube output accounted for a 0.5pc share of the UK’s total output in April. The share was down from an average of 0.8pc in 2021.