· US Group II base oils supply faces upward pressure; Europe supply stays balanced to tight.· Diesel prices fall on outright basis and relative to crude oil.· Diesel price weakness contrasts with mostly-steadier base oils prices in US and Europe.· Firmer base oils values increase incentive for refiners to boost base oils output.· US Group I base oils supply likely to remain tight in Q4 2023 because of plant maintenance work in US and Brazil.· Dearth of arbitrage shipments from markets like Europe or Mideast Gulf add to relative tightness.· US Group II supply likely to face upward pressure from delays/slowdown in shipments to Mexico.· Firmer Group II base oils values versus crude/diesel give refiners more room to adjust prices to make arbitrage more feasible if required to clear any surplus.· Wave of US cargoes to West Africa and South Africa in recent weeks likely include term and spot shipments.· Shipments likely to help to slow any build-up of surplus Group II supplies in US.· Shipments point to focus on avoiding major supply-build in Q4 2023, and adjusting prices accordingly.· Group III producer’s move to cut US posted prices reflects slack Group III base oils supply-demand fundamentals.· US Group III prices maintain steep premium to Europe prices even as they edge lower in recent weeks.· Firm prices boost incentive for overseas refiners to target US with more supplies.· Wave of shipments from South Korea scheduled to reach US in Nov 2023..· US’ Sept base oils exports rise from Aug 2023, climb for tenth time in eleven months from year-earlier levels..· Exports rise even after US refiners raised base oils prices in Aug 2023.· Sustained rise in exports through Q3 2023 cushions impact of seasonal slowdown in domestic demand in US.· Trend curbs size of any build-up of surplus supply before Q4 2023..· Brazil’s September base oils supply falls to three-year low on simultaneous dip in imports and domestic production..· Domestic base oils production falls in Sept 2023 to lowest since mid-2020.· Domestic base oils production likely to stay low in Q4 2023 because of scheduled plant maintenance work.· Brazil’s base oils imports could get boost in Q4 2023 from signs of pick-up in US shipments at end-Q3 2023.· Demand for imports likely to hold firm at least to year-end after Brazil flips to steep supply shortfall in Sept 2023 even before maintenance work begins..· Argentina’s September base oils supply rises as imports climb to ten-month high..· Imports rise on surge in shipments from US to highest in more than a year.· Argentina’s base oils imports also rose strongly in 2H 2022 because of boost in shipments from Mideast Gulf and South Korea.· Argentina’s imports from South Korea pause, and imports from UAE almost pause, since Q2 2023.· Trend reflects less workable arbitrage to move supplies from those markets to Latin America this year.· Trend highlights benefit for US supplies, with rise in shipments even as Argentina’s lube demand falls.· Value of that trend likely to be all the more important over coming months as US market faces seasonal slowdown and rise in surplus supplies.· Argentina’s Q3 base oils supply rises to second-highest level in more three years..· Rise in supplies coincides with slowing lube demand, could curb requirements in Q4 2023 to avoid large supply-build. .· Europe’s August Group II base oils supply falls yoy for third month..· Europe’s supply likely faced further downward pressure in Sept 2023 from Aug 2023 amid signs of drop in shipments from US.· Lower Group II supply during Q3 2023 cushions impact of seasonal dip in demand, curbing supply-build.· More balanced supply fundamentals give refiners more leverage to maintain firmer price levels relative to feedstock and competing fuel prices during Q4 2023..· Spain’s premium-grade base oils shipments to northwest Europe hold firm in Oct 2023 even as total exports fall..· Steady flows coincide with signs of pick-up in shipments from Mideast Gulf to Europe in Oct 2023.· Trend would leave European market with healthy availability of Group III base oils in Q4 2023, ahead of seasonal slowdown in demand at year-end.
· US Group II base oils supply faces upward pressure; Europe supply stays balanced to tight.· Diesel prices fall on outright basis and relative to crude oil.· Diesel price weakness contrasts with mostly-steadier base oils prices in US and Europe.· Firmer base oils values increase incentive for refiners to boost base oils output.· US Group I base oils supply likely to remain tight in Q4 2023 because of plant maintenance work in US and Brazil.· Dearth of arbitrage shipments from markets like Europe or Mideast Gulf add to relative tightness.· US Group II supply likely to face upward pressure from delays/slowdown in shipments to Mexico.· Firmer Group II base oils values versus crude/diesel give refiners more room to adjust prices to make arbitrage more feasible if required to clear any surplus.· Wave of US cargoes to West Africa and South Africa in recent weeks likely include term and spot shipments.· Shipments likely to help to slow any build-up of surplus Group II supplies in US.· Shipments point to focus on avoiding major supply-build in Q4 2023, and adjusting prices accordingly.· Group III producer’s move to cut US posted prices reflects slack Group III base oils supply-demand fundamentals.· US Group III prices maintain steep premium to Europe prices even as they edge lower in recent weeks.· Firm prices boost incentive for overseas refiners to target US with more supplies.· Wave of shipments from South Korea scheduled to reach US in Nov 2023..· US’ Sept base oils exports rise from Aug 2023, climb for tenth time in eleven months from year-earlier levels..· Exports rise even after US refiners raised base oils prices in Aug 2023.· Sustained rise in exports through Q3 2023 cushions impact of seasonal slowdown in domestic demand in US.· Trend curbs size of any build-up of surplus supply before Q4 2023..· Brazil’s September base oils supply falls to three-year low on simultaneous dip in imports and domestic production..· Domestic base oils production falls in Sept 2023 to lowest since mid-2020.· Domestic base oils production likely to stay low in Q4 2023 because of scheduled plant maintenance work.· Brazil’s base oils imports could get boost in Q4 2023 from signs of pick-up in US shipments at end-Q3 2023.· Demand for imports likely to hold firm at least to year-end after Brazil flips to steep supply shortfall in Sept 2023 even before maintenance work begins..· Argentina’s September base oils supply rises as imports climb to ten-month high..· Imports rise on surge in shipments from US to highest in more than a year.· Argentina’s base oils imports also rose strongly in 2H 2022 because of boost in shipments from Mideast Gulf and South Korea.· Argentina’s imports from South Korea pause, and imports from UAE almost pause, since Q2 2023.· Trend reflects less workable arbitrage to move supplies from those markets to Latin America this year.· Trend highlights benefit for US supplies, with rise in shipments even as Argentina’s lube demand falls.· Value of that trend likely to be all the more important over coming months as US market faces seasonal slowdown and rise in surplus supplies.· Argentina’s Q3 base oils supply rises to second-highest level in more three years..· Rise in supplies coincides with slowing lube demand, could curb requirements in Q4 2023 to avoid large supply-build. .· Europe’s August Group II base oils supply falls yoy for third month..· Europe’s supply likely faced further downward pressure in Sept 2023 from Aug 2023 amid signs of drop in shipments from US.· Lower Group II supply during Q3 2023 cushions impact of seasonal dip in demand, curbing supply-build.· More balanced supply fundamentals give refiners more leverage to maintain firmer price levels relative to feedstock and competing fuel prices during Q4 2023..· Spain’s premium-grade base oils shipments to northwest Europe hold firm in Oct 2023 even as total exports fall..· Steady flows coincide with signs of pick-up in shipments from Mideast Gulf to Europe in Oct 2023.· Trend would leave European market with healthy availability of Group III base oils in Q4 2023, ahead of seasonal slowdown in demand at year-end.