The UK’s base oils output fell to a five-month low in July, countering a recovery in Spain’s production and triggering a drop in Europe’s Group I base oils supply.The UK’s base oils output of 13,800 tonnes in July fell from 38,400 tonnes the previous month to the lowest since February, government data showed.The fall in production contrasted with and exceeded a recovery in Spain’s Group I base oils output to close to 30,000 tonnes in July. The volume was the highest since the third quarter of 2022.Spain’s higher output coincided with a rise in Europe’s Group I base oils imports to a six-month high in July.The additional output and shipments cushioned a drop in Europe’s total Group I base oils supply to less than 175,000 tonnes in July.The volume fell from more than 185,000 tonnes in June to the lowest in five months. It was also down from more than 200,000 tonnes during the same month a year earlier.The lower volume helped to slow the pace of a build-up of supplies at a time of year when the region typically sees a rise in surplus volumes. A seasonal slowdown in lube demand usually then compounds the rise in surplus volumes.An ongoing slide in the region’s lube consumption magnified the impact of the seasonal dip in demand.Europe’s Group I base oils exports to markets outside the region rose in July despite the drop in supply.The rise in exports curbed further the pace of any supply-build in the region at the start of the third quarter.The pick-up in shipments also added to signs of weak regional demand and to refiners’ preference to maintain lower stocks.With lower supply balancing out weak demand, Europe’s domestic Group I base oils prices held firm at the start of the third quarter relative to feedstock prices and relative to premium-grade base oils prices..Europe’s July Grp I base oil exports rise.Italy’s July base oils output holds steady .Europe’s July Group III supply stays rangebound.Europe’s July lube demand improves
