The UK’s base oils output rose in September to the highest in almost six years, more than outweighing a drop in Group I production in Italy and Spain.The surge in output, combined with a rise in Europe’s base oils imports from markets producing Group I base oils, lifted the region’s Group I supply to a seventeen-month high.Supply rose ahead of a seasonal slowdown in demand in the fourth quarter of the year.The diverging supply-demand fundamentals raised the prospect of adding to pressure on the region’s Group I prices during the final months of the year.The UK’s base oils output of 46,000 tonnes in September more than doubled from the same month a year earlier to the highest since October 2018, government data showed.The surge in output added to a sustained rise in base oils production to 128,000 tonnes in the four months to September.The volume was up more than 50% from less than 85,000 tonnes during the same period last year.The pick-up in output, combined with a sustained rise in Europe’s base oils imports, boosted the region’s base oils supply from Group I sources to around 210,000 tonnes in September.The volume was the highest since April 2023.Europe's supply of close to 570,000 tonnes in the third quarter was the highest for that three-month period since 2021.The rise in Europe’s base oils supply also contrasted with a fall in the region’s Group I exports to non-EU markets in September for the seventh time in eight months from year-earlier levels.The diverging trends added to the rise in surplus supply.The higher-than-usual volume for the time of year was likely more than sufficient to cover a seasonal pick-up in regional demand at the end of the third quarter.The rise in supply then preceded a seasonal slowdown in regional consumption during the final months of the year..Europe’s September base oils exports fall.Europe’s Sept Group III supply falls.Netherlands’ Sept base oils output rises.Base Oil News stories and analysis also available on ICIS platform
