The UK’s base oils output recovered in August, adding to a sustained rise in Europe’s Group I base oils supply in the second and third quarters of the year.The rise in Group I supply coincided with shrinking lube demand that compounded a seasonal slowdown in consumption in the region.Europe’s Group I base oils prices began to weaken relative to other base oils grades from the middle of the third quarter, reflecting the growing disconnect between supply and demand.The UK’s base oils output of 29,800 tonnes in August rose from a five-month low of less than 14,000 tonnes in July and by 26% from year-earlier levels, government data showed.The rise in production balanced out a drop in Group I base oils output in other markets like Italy and Spain in August.Europe’s Group I base oils supply duly held steady at around 185,000 tonnes in August.The volume was similar to June and July and rose for the third time in four months from year-earlier levels.The trend lifted Europe’s Group I supply to more than 750,000 tonnes in the four months to August, up 10% from year-earlier levels.The higher volume contrasted with the first four months of the year, when supply of less than 740,000 tonnes was 9% lower than year-earlier levels.The drop in supply outpaced a 6% fall in Europe’s lube demand in the first four months of the year from year-earlier levels.The tighter supply coincided with a rebound in Europe’s Group I base oils prices from the start of the second quarter of the year on an outright basis and relative to premium-grade base oils.The more plentiful and rising supply since the summer by contrast compared with a 9% fall in Europe’s lube demand in the four months to August.The diverging supply-demand fundamentals coincided with weaker Group I values relative to Group II and Group III base oils prices in August and September. The region’s Group I prices strengthened relative to Group II and Group III prices in October.The dynamic could point to an improvement in Group I supply-demand fundamentals relative to premium-grade base oils in recent weeks..Italy’s August base oils stocks rise.Europe’s August lube demand falls.Europe’s Aug Group III supply rises
The UK’s base oils output recovered in August, adding to a sustained rise in Europe’s Group I base oils supply in the second and third quarters of the year.The rise in Group I supply coincided with shrinking lube demand that compounded a seasonal slowdown in consumption in the region.Europe’s Group I base oils prices began to weaken relative to other base oils grades from the middle of the third quarter, reflecting the growing disconnect between supply and demand.The UK’s base oils output of 29,800 tonnes in August rose from a five-month low of less than 14,000 tonnes in July and by 26% from year-earlier levels, government data showed.The rise in production balanced out a drop in Group I base oils output in other markets like Italy and Spain in August.Europe’s Group I base oils supply duly held steady at around 185,000 tonnes in August.The volume was similar to June and July and rose for the third time in four months from year-earlier levels.The trend lifted Europe’s Group I supply to more than 750,000 tonnes in the four months to August, up 10% from year-earlier levels.The higher volume contrasted with the first four months of the year, when supply of less than 740,000 tonnes was 9% lower than year-earlier levels.The drop in supply outpaced a 6% fall in Europe’s lube demand in the first four months of the year from year-earlier levels.The tighter supply coincided with a rebound in Europe’s Group I base oils prices from the start of the second quarter of the year on an outright basis and relative to premium-grade base oils.The more plentiful and rising supply since the summer by contrast compared with a 9% fall in Europe’s lube demand in the four months to August.The diverging supply-demand fundamentals coincided with weaker Group I values relative to Group II and Group III base oils prices in August and September. The region’s Group I prices strengthened relative to Group II and Group III prices in October.The dynamic could point to an improvement in Group I supply-demand fundamentals relative to premium-grade base oils in recent weeks..Italy’s August base oils stocks rise.Europe’s August lube demand falls.Europe’s Aug Group III supply rises
