Japan’s base oils and lube output fell in May from unusually high levels in the previous two months amid signs the country’s refiners were focusing on producing more motor fuels.Unusually high middle distillate prices relative to crude since late February have contrasted with low base oil prices relative to feedstock costs in the Asia-Pacific region. The price dynamic incentivizes refiners to boost output of diesel and jet fuel and to cut production of base oils.That expectation was now starting to materialize in Japan.Base oils and lube output of 172,210 kilolitres (152,550t) in May fell by 11pc from 193,560kl the previous month, government data showed.The April volume had been the second highest in 13 months. The May volume was now closer to typical output levels of around 166,110 kl/month over the past year..Base oils production fell even as Japan’s refiners boosted total oil products output by 3pc in May from the previous month. The increase was focused on transport fuels.Output of jet fuel rose by 31pc in May from the previous month and gasoil production by 9pc. Gasoline output was up 2pc.Japan’s base oil exports remained unusually high in May even as the country’s output has begun to trend lower. The high export volumes added to healthy regional supply availability that has curbed the rise in base oil prices and incentivized the switch to distillates..Japan’s May base oil exports rise
