· US base oils prices rise versus feedstock/competing fuel prices, especially for Group II light-grade export prices..· Firmer margins point to steady-to-tight supply-demand fundamentals at a time of year when they typically start to weaken.· Firmer margins incentivize refiners to maintain or raise output.· Supply could be tighter than expected for time of year after sustained wave of shipments to markets like India limit build-up of surplus volumes.· Latest India-bound shipment sets off from US around mid-Oct 2025.· Ongoing plant-maintenance work in Oct 2025 cuts domestic base oils output levels, further cutting supply.· Recent outperformance of US export prices over domestic prices suggests supply remains sufficient in domestic market, even with current factors curbing size of that supply.· US base oils supply could build following completion of plant-maintenance work.· US base oils supply could face additional upward pressure from any slowdown in demand from overseas markets.· Any such slowdown could materialize because of seasonal factors in markets like Europe, regulatory changes in Mexico and rising supply in Asia.· Singapore’s base oils imports from US already fall sharply so far in Oct 2025 after surge in shipment-arrivals in Sept 2025..· Rise in shipments to Singapore in year to Sept 2025 precedes start-up of new plant in the country that month.· Any extension of recent slowdown in shipments to Singapore could reflect impact of start-up of new unit, subsequent rise in city-state’s supply and lack of need for supplementary volumes from other sources.· US Group III base oils supply likely to get boost from signs of recovery in flows from Middle East and Asia.· South Korea’s base oils exports to US rise to seven-month high in Sept 2025, with large shipment reaching US at start of this week..· Rise in flows from South Korea follows arrival of several large shipments from Middle East in Sept 2025.· Group III base oils shipments from Asia and Middle East faced disruption in preceding months because of plant-maintenance work in both regions.· Timing of more elevated US Group III base oils price-premium to Group II prices coincides with timing of plant-maintenance work in Middle East and Asia.· Group III prices maintain higher premium to Group II base oils at start of Q4 2025 even with signs of resumption of more typical flows from Middle East and Asia..· Europe’s base oils supply stays more mixed.· Sustained weakness of Group I base oils prices points to lingering surplus supply.· Europe’s slack lube demand and high base oil export prices relative to other markets complicate removal of surplus supply.· Italy’s base oils stocks rise to six-month high in Aug 2025 as relatively steady output contrasts with sharp dip in consumption..· Prospect of same dynamic repeating itself among other regional plants in Q3 2025 would magnify subsequent buildup of surplus volumes.· Steady output would coincide with fall in Europe’s Group I base oils exports to markets outside the region in Aug 2025..· Steady output and slowdown in exports compounds build-up of supplies against backdrop of weak regional demand..· Europe’s Group III base oils supply shows signs of holding firm.· Supply likely to rise in Oct 2025 from previous month, after supply rises in Aug 2025 to highest this year..· Supply in Oct 2025 likely to get boost from pick-up in arrival of shipments from Bahrain especially.· Supply could get further boost from signs of stronger pick-up in cargo-loadings from Middle East.· Wave of Group III base oils shipments load or set to load from UAE and Bahrain in H2 Oct 2025, with Europe a likely destination for large portion of the supplies.· Europe’s Group III base oils price-differentials hold at more elevated levels vs Group II base oils and feedstock prices even with steady supply..· Firm price-differentials could reflect impact of tighter availability recently from certain sources like Bahrain.· Firmer price-differentials could also point to pick-up in demand for Group III base oils..· More Group II base oils shipments from Asia could start to target Europe and Americas in response to any slowdown in demand in India and Middle East.· Size of surge in South Korea's base oils shipments to India and Middle East in Sept 2025 likely to leave stocks at more elevated levels.· Rise in shipments boosts South Korea’s base oils exports to Middle East in Q3 2025 to highest level since beginning of 2024..· Rise in shipments coincides with increasingly competitive CFR UAE Group II heavy-grade price versus Group I base oils..· Any slowdown in demand because of high stocks or more competitive Group I prices could put pressure on South Korea’s shipments to target other markets like Europe instead..Europe’s Aug Group III supply holds firm.S Korea September exports to India rise.S Korea’s September exports to US rise
