US base oils supply fell to a three-month low in May as a dip in imports outweighed a recovery in domestic production.The dynamic left rising domestic output accounting for its largest share of the country’s total supply in almost three years.US refiners’ growing share of total supply followed moves to produce more Group III base oils instead of Group II supplies.The rise in domestic output of Group III base oils curbed the country’s requirements for premium-grade shipments from overseas markets.Those domestic supplies then tapped a market where Group III prices remained at a premium to Group II base oils.Refiners’ switch to Group III base oils also trimmed output of Group II base oils.Tighter Group II supply supported a strong rise in prices for the product since the start of the second quarter of the year.It also trimmed the surplus volume of Group II base oils available for export, for which prices remained at a steep discount to US domestic prices.US base oils and lube output of 5.08 million barrels (715,000 tonnes) in May rose from 4.93 million barrels the previous month, according to the EIA.Output climbed on the back of a rebound in production in the US Gulf coast region to a twenty-two-month high of 4.24 million barrels.The region’s output rose even with some plant maintenance work extending into the first few weeks of May.The rise in output coincided with tight supplies of Group II light grades and increasingly firm margins for the product that incentivized refiners to maximise base oils output.The rise in output contrasted with a slump in base oils imports to less than 1mn barrels in May. The volume was the second-lowest since mid-2021.With imports sliding more steeply than the rise in output, the US’ total supply fell to 6.04 million barrels in May, down from more than 6.40 million barrels the previous month.US output accounted for 84% of the supply. The share rose from 77% of total supply the previous month and in 2023 to the highest since July 2021..S Korea’s June exports rise to Latam, fall to US.Global premium-grade imports from Mideast Gulf fall in May
US base oils supply fell to a three-month low in May as a dip in imports outweighed a recovery in domestic production.The dynamic left rising domestic output accounting for its largest share of the country’s total supply in almost three years.US refiners’ growing share of total supply followed moves to produce more Group III base oils instead of Group II supplies.The rise in domestic output of Group III base oils curbed the country’s requirements for premium-grade shipments from overseas markets.Those domestic supplies then tapped a market where Group III prices remained at a premium to Group II base oils.Refiners’ switch to Group III base oils also trimmed output of Group II base oils.Tighter Group II supply supported a strong rise in prices for the product since the start of the second quarter of the year.It also trimmed the surplus volume of Group II base oils available for export, for which prices remained at a steep discount to US domestic prices.US base oils and lube output of 5.08 million barrels (715,000 tonnes) in May rose from 4.93 million barrels the previous month, according to the EIA.Output climbed on the back of a rebound in production in the US Gulf coast region to a twenty-two-month high of 4.24 million barrels.The region’s output rose even with some plant maintenance work extending into the first few weeks of May.The rise in output coincided with tight supplies of Group II light grades and increasingly firm margins for the product that incentivized refiners to maximise base oils output.The rise in output contrasted with a slump in base oils imports to less than 1mn barrels in May. The volume was the second-lowest since mid-2021.With imports sliding more steeply than the rise in output, the US’ total supply fell to 6.04 million barrels in May, down from more than 6.40 million barrels the previous month.US output accounted for 84% of the supply. The share rose from 77% of total supply the previous month and in 2023 to the highest since July 2021..S Korea’s June exports rise to Latam, fall to US.Global premium-grade imports from Mideast Gulf fall in May