· Diesel premium to crude falls to lowest in more than a year.· Lower diesel premium cuts attraction of producing more of the motor fuel instead of other products unless prices for other products are also low.· US base oils supply set to improve in coming weeks following likely completion of extended plant shutdown.· US base oils exports show signs of slowing in February – raising prospect of sustaining high domestic stocks unless output fell.· US base oils exports likely to need to stay higher as output revives – unless domestic demand rises strongly. · US Gulf coast base oils output rises in January even as middle distillates output falls..· Rising base oils output in US/Italy/Spain in early 2023 contrasts with muted demand - highlighting importance of responding to regional and overseas prices to maintain balanced fundamentals. · Volatility of volume of US base oil imports from South Korea in recent months points to some kind of structural change.· Plant maintenance in Europe, removal of surplus cargoes in Q1 2023, and loss of Russian supplies could tighten availability in current quarter.· Europe Group II supply overhang likely to face less pressure from US supplies amid signs of slowdown in shipments.· Spain’s January Group I base oils output rises, mirroring similar trend in Italy..· Signs of steep rise in supply in Europe in January coincided with clear, well sign-posted slowdown in demand.· Repercussion was predictable – additional oversupply, and additional downward pressure on prices.· Clear signs of weak demand suggests some of that oversupply and price pressure could have been avoided.· Europe’s base oils supply had mostly remained lower than usual in late 2022; unclear why it rose sharply in January when demand was weak.· Healthy availability globally means prices must be more responsive – or supply builds fast as buyers cover requirements with supplies from elsewhere.· Surge in Spain’s premium-grade base oils exports in March could reflect moves to build stocks ahead of plant shutdown later in Q2..Americas/EMEA base oils - week of Apr 10: Demand outlook
· Diesel premium to crude falls to lowest in more than a year.· Lower diesel premium cuts attraction of producing more of the motor fuel instead of other products unless prices for other products are also low.· US base oils supply set to improve in coming weeks following likely completion of extended plant shutdown.· US base oils exports show signs of slowing in February – raising prospect of sustaining high domestic stocks unless output fell.· US base oils exports likely to need to stay higher as output revives – unless domestic demand rises strongly. · US Gulf coast base oils output rises in January even as middle distillates output falls..· Rising base oils output in US/Italy/Spain in early 2023 contrasts with muted demand - highlighting importance of responding to regional and overseas prices to maintain balanced fundamentals. · Volatility of volume of US base oil imports from South Korea in recent months points to some kind of structural change.· Plant maintenance in Europe, removal of surplus cargoes in Q1 2023, and loss of Russian supplies could tighten availability in current quarter.· Europe Group II supply overhang likely to face less pressure from US supplies amid signs of slowdown in shipments.· Spain’s January Group I base oils output rises, mirroring similar trend in Italy..· Signs of steep rise in supply in Europe in January coincided with clear, well sign-posted slowdown in demand.· Repercussion was predictable – additional oversupply, and additional downward pressure on prices.· Clear signs of weak demand suggests some of that oversupply and price pressure could have been avoided.· Europe’s base oils supply had mostly remained lower than usual in late 2022; unclear why it rose sharply in January when demand was weak.· Healthy availability globally means prices must be more responsive – or supply builds fast as buyers cover requirements with supplies from elsewhere.· Surge in Spain’s premium-grade base oils exports in March could reflect moves to build stocks ahead of plant shutdown later in Q2..Americas/EMEA base oils - week of Apr 10: Demand outlook
