Brazils April base oil imports fall

Brazil’s base oil imports fell in April, mirroring a slowdown in domestic production and cutting supply for a sixth straight month.

Imports of 55,600mᶟ (49,250t) in April fell from 74,130mᶟ the previous month and by 26pc from 75,500mᶟ the same time a year ago, government data showed.

Imports of 230,380mᶟ during the first four months of the year were down by more than half from year-earlier levels, when domestic lube consumption was surging.

The fall in imports over each of the last six months coincided with a drop in Brazil’s base oil production. The move helped to reverse last year’s surge in surplus supplies in the face of weakening lube consumption during the second half of the year.

Brazil’s base oil imports and domestic production have held in a relatively narrow range since last December. They have also increasingly matched the country’s domestic lube consumption during that time, leaving net supply relatively balanced.

Steadier import volumes at lower levels than last year raise the prospect of cushioning the impact of supply tightness from key overseas sources like the US market.

The possibility of that scenario has risen as US refiners focus on maximizing production of diesel.