Asia’s Sept base oils supply surplus falls

Asia’s surplus of base oils supply over regional demand fell in September, limiting the size of a supply overhang in the third quarter of the year.

The surplus of base oils supply over demand fell to less than 105,000t in September, from more than 190,000t the previous month, government and industry data showed.

The smaller supply overhang cut the region’s surplus to around 330,000t in the third quarter.

The surplus fell from more than 500,000t during the previous three months. It fell by more than half from more than 700,000t during the third quarter of 2022.

The surplus fell even as regional base oils supply rose in the third quarter.

The region’s lube demand unexpectedly rose even more.

The large supply surplus in the third quarter of 2022 prompted base oils price adjustments that triggered a wave of arbitrage shipments to more distant markets.

The small supply surplus in the third quarter of this year curbed the need for such price adjustments.