· Diesel premium to crude holds at lowest in more than a year, much higher than long-term average.· Firm diesel premium incentivizes refiners to maintain high middle distillates output.· Base oils plant maintenance work to gather pace in Europe, Asia in Q2 2023, slow down in US.· US supply set to get boost following imminent restart of base oils unit after completion of maintenance work.· Signs of arbitrage shipments from US to Africa/India reflect persistent surplus – and help to remove some of the surplus.· Argentina’s February domestic output rises, covering for pause in arbitrage shipments, despite availability of surplus supplies in US..· Move highlights relative complication of moving surplus US supplies to Argentina and their need to target more distant markets instead.· Arbitrage shipments of heavy grades from Asia continue to move to Latin America in Q1 2023.· US supplies move to Nigeria despite plentiful availability of Russian base oils at steeply-discounted prices.· Shipment of US supplies to Nigeria highlights complications of moving Russian base oils to the West African country.· Nigeria covers requirements in early 2023 with surge in European shipments in Dec-Jan.· Slowdown in Europe and Baltic shipments to Nigeria since then boost importance of sources like US.· Scenario raises prospect of repeating trend of 1H 2022, when US shipments to Nigeria surged.· Slowdown in European arbitrage Group I shipments points to more balanced-to-tighter regional supply.· Netherlands’ high base oils output in late 2022 and early 2023 coincides with unusually weak regional demand and lower Europe Group II prices..· Netherlands’ high output complicates flow of shipments from US to Europe, adding to surplus in Americas.· Europe's premium-grade supplies need to fall, or demand rise, to revive more regular flow of larger volumes from US to the region..Global base oils - week of April 3: Demand outlook
