· Diesel premium to crude steadies close to lowest since early 2022.· Lower diesel premium to crude incentivizes refiners to focus on more profitable products like base oils.· Global base oils supply falls sharply in February in Americas, Europe and Asia..· Fall in global supply coincides with rising demand, slashing surplus supply.· More balanced net supply coincides with rising global base oils values vs crude/diesel.· Global supply likely improved in March on recovery in Asia-Pacific base oils output especially.· Global supply likely to improve in US in Q2 following completion of plant maintenance work, stay lower in Europe and Asia as plant shutdowns cut output.· Rising US base oils imports in Q1 cushion impact of lower domestic output, complicate US refiners’ moves to clear surplus volumes.· Rising US base oils imports include increasingly steady flows from Netherlands, Saudi Arabia.· Rising supplies from those sources add to Group I, Group II base oils supply in US.· US supply surplus lingers in Q2 2023 even amid wave of arbitrage supplies to other markets.· Trend highlights repercussion of still weaker-than-usual domestic demand in US market.· Firm US base oils prices relative to crude and diesel add to domestic refiners’ incentive to produce more base oils, adding to oversupply. · Europe’s base oils supply more balanced in Q2 2023 following swift removal of surplus volumes in Q1 2023.· Sharp fall in Europe’s surplus Group I supplies coincide with lower output and wave of arbitrage shipments, clearing large overhang..· More balanced supply in Q2 curbs pressure on refiners to adjust prices in response to lower feedstock costs.· Italy’s base oils output stays lower than usual in March, curbing any supply-build at the same time as regional demand improves.· Europe’s still-firm Group II prices relative to Asia shows signs of attracting more supplies to the region or to markets that Europe typically targets with supplies.· Trend would need to change when Europe has surplus supplies to clear.· Europe’s Group III base oils supply shows signs of rebounding in late Q1, easing in April, then improving in May as a wave of supplies from the Mideast Gulf reach the region.· Europe’s Group III base oils supply from Spain holds steady in 1H May, even with scheduled plant maintenance work. .Americas/EMEA base oils - week of May 22: Demand outlook.Contact us for more information about the data for these stories
· Diesel premium to crude steadies close to lowest since early 2022.· Lower diesel premium to crude incentivizes refiners to focus on more profitable products like base oils.· Global base oils supply falls sharply in February in Americas, Europe and Asia..· Fall in global supply coincides with rising demand, slashing surplus supply.· More balanced net supply coincides with rising global base oils values vs crude/diesel.· Global supply likely improved in March on recovery in Asia-Pacific base oils output especially.· Global supply likely to improve in US in Q2 following completion of plant maintenance work, stay lower in Europe and Asia as plant shutdowns cut output.· Rising US base oils imports in Q1 cushion impact of lower domestic output, complicate US refiners’ moves to clear surplus volumes.· Rising US base oils imports include increasingly steady flows from Netherlands, Saudi Arabia.· Rising supplies from those sources add to Group I, Group II base oils supply in US.· US supply surplus lingers in Q2 2023 even amid wave of arbitrage supplies to other markets.· Trend highlights repercussion of still weaker-than-usual domestic demand in US market.· Firm US base oils prices relative to crude and diesel add to domestic refiners’ incentive to produce more base oils, adding to oversupply. · Europe’s base oils supply more balanced in Q2 2023 following swift removal of surplus volumes in Q1 2023.· Sharp fall in Europe’s surplus Group I supplies coincide with lower output and wave of arbitrage shipments, clearing large overhang..· More balanced supply in Q2 curbs pressure on refiners to adjust prices in response to lower feedstock costs.· Italy’s base oils output stays lower than usual in March, curbing any supply-build at the same time as regional demand improves.· Europe’s still-firm Group II prices relative to Asia shows signs of attracting more supplies to the region or to markets that Europe typically targets with supplies.· Trend would need to change when Europe has surplus supplies to clear.· Europe’s Group III base oils supply shows signs of rebounding in late Q1, easing in April, then improving in May as a wave of supplies from the Mideast Gulf reach the region.· Europe’s Group III base oils supply from Spain holds steady in 1H May, even with scheduled plant maintenance work. .Americas/EMEA base oils - week of May 22: Demand outlook.Contact us for more information about the data for these stories