Brazil’s base oils output rose to a four-month high in December at the same time as a seasonal slowdown in the country’s lube consumption.
The diverging trends raised the prospect of a rise in surplus supplies at year-end unless base oils imports fall.
There were signs of a slowdown shipments to Brazil in December following a slump in US exports to the country in November.
Brazil’s base oils output also remained lower than in second-half 2021, when surging production and imports triggered a jump in surplus supplies.
Output of 56,250mᶟ (49,830t) in December rose from less than 50,750mᶟ the previous month, government data showed.
Output rose from year-earlier levels for the second time in the last seven months.
The prolonged slowdown cut the country’s total production to 576,440mᶟ in 2022. The volume fell by 7pc from 621,660mᶟ the previous year.
The fall in output was similar to the volume size of the drop in the country’s lube consumption in 2022.
The slowdown, along with a fall in the country’s base oils imports last year, helped to prevent a repeat of the large supply-build that materialized in second-half 2021.
Output rose in December on the back of an increase in production at Petrobras’ Group I base oils plant at its Reduc refinery.
The higher output kept pace with a rise in the refinery’s total refined products output to its highest since 2015.
Base oils output accounted for some 3.7pc of the refinery’s total output in December, similar to the previous month.
Gasoline accounted for a growing share of the refinery’s output since September and maintained that trend in December.
Brazil's higher base oils output in December trimmed its shortfall to domestic lube consumption to its narrowest level in four months, cutting the country’s import requirements.
