UK’s May base oils output stays low

The UK’s base oils and lube output stayed lower than usual in May amid signs of a sustained focus on production of middle distillates.

Base oils and lube output of 23,830t in May rose from 20,650t the previous month and from less than 2,000t in March, government data showed.

The volume was down from typical levels of close to 29,000 t/month in 2021.

The sustained slowdown in production cut total base oils and lube output to 142,880t in the first five months of the year. The volume was down 36pc from year-earlier levels of 104,940t.

The drop in base oils output coincided with a seasonal rise in lube demand throughout Europe.

Demand for automobile lubricants got a further boost following the easing of pandemic restrictions earlier in the year.

Base oils supply was also tighter than usual because of extended plant maintenance in Italy and a drop in shipments from Russia.

Regional base oils prices surged in response to the tight supply.

Middle distillates prices rose even more sharply. The trend incentivized refiners to focus on producing more diesel and jet fuel.

UK refined products output rose in May to its highest since the beginning of 2020.

Production of diesel and jet fuel accounted for some 35pc of that volume. The share was up from around 30pc in 2021 and the highest since 2019.

Base oils accounted for 0.52pc of total refined products output in May. The share was up from 0.46pc the previous month, but down from 0.77pc in 2021.