US exports of base oil and lubricants hit record highs in March as domestic consumption fell to a record low.
Base oil and lubricant exports in March were 4.1mn bl (132,000 b/d), up by 78pc from February levels of 2.3mn bl, according to the US Energy Information Administration (EIA). Exports also rose by 12pc from year-earlier levels of 3.67mn bl.
Refiners worked to push more volumes into the export market as domestic consumption of base oils and lubricants hit a record low of 1.77mn bl (57,000 b/d).
Domestic consumption was restricted as blenders and downstream buyers worked to draw down and limit inventory building. Inventory control was driven by efforts to minimize the risk of stocks depreciating in a falling price environment.
US Gulf coast (USGC) refiners lowered export prices in an effort to clear building surplus inventories. Spot export prices fell by $0.20-0.25/USG throughout March, making USGC product more competitive globally.
US exports to Mexico increased to their second-highest level on record of 1.41mn bl. This put exports up by 49pc from February levels of 947,000 bl and up by 87pc from 753,000 bl a year earlier.
Export demand to Mexico increased as USGC refiners lowered prices and limited the attractiveness of imports from competing regions.
US base oil and lubricant exports to several key European countries also increased as demand in the region firmed. Exports to Belgium, France and the Netherlands rose to 647,000 bl, close to five times higher than February volumes of 146,000 bl.
Demand also firmed to South America, particularly several countries on the west coast. March exports of base oils to Peru hit a one-year high of 110,000 bl and shipments to Chile reached a 10-month high of 125,000 bl.
Exports to Brazil were 324,000 bl, an increase of 25pc from February levels of 259,000 bl. Exports to Brazil also rose by 4.6pc from year-earlier levels of 310,000 bl. There was more export demand from Brazil on the back of reduced domestic production because of refinery issues at several key facilities.
Base oil exports to Israel hit a record high of 352,000 bl in March.
