· US Group II base oils price-premium to heating oil edges lower, stays in narrow range since start of Q2 2025.· Base oils price-premium stays rangebound even with expected improvement in supply and slowdown in demand in coming weeks.· US base oils supply could rise more swiftly in coming weeks following completion of plant-maintenance work.· Completion of any weather-related stock-building would remove temporary support for demand, magnifying pick-up in supply.· Surplus supply shows signs of already rising in Q2 2025 following completion of some plant-maintenance work.· US base oils/lube exports to Mexico and India recover in May 2025 after dipping the previous month..· Those markets, as well as West Africa, are regular outlets to clear surplus volumes.· US exports to West Africa extend fall to five-month low in May 2025..· Fall in shipments in May 2025 suggests that size of surplus volumes remains more limited and manageable than in Q1 2025.· Dynamic suggests US likely started Q3 2025 with lower, more manageable supplies.· Lower, more manageable supplies would curb pressure/urgency to clear large volumes of surplus shipments.· Dynamic highlights benefit of maintaining lower, more manageable supplies.· Dynamic suggests US export prices will need to hold at levels in Q3 2025 that sustain regular arbitrage shipments to outlets like Mexico/West Africa/India.· Dynamic suggests US export prices would need to respond more to CFR prices in those markets, rather than the other way round..· Lower US imports could also keep US supply lower than usual in early-Q3 2025.· US base oils imports show signs of staying lower than usual at start of Q3 2025.· Lower volumes would follow dip in US imports in May 2025 because of slump in shipments from Middle East..· Dip in supplies from Middle East shows signs of extending into start of Q3 2025.· Slowdown coincides with Group III plant-maintenance in Bahrain and UAE in Q2 2025.· Lower imports in early-Q3 2025 could slow pace of rise in US supply, further curbing urgency to clear large shipments in overseas markets. .· Europe’s base oils supply likely to get boost from easing demand and ongoing recovery in regional output following maintenance-work throughout H1 2025.· Italy’s Group I base oils output recovers to three-month high in May 2025, reflecting that dynamic..· Recovery in Italy’s base oils output helps to cushion impact of Group I plant-maintenance work in other countries in Q2 2025..· Europe’s Group II base oils supply likely to remain at healthy levels amid firm regional output and pick-up in flows from key overseas markets.· US base oils exports to Europe rise to eight-month-high in May 2025..· Shipment volume breaks out of narrow monthly range since start of 2025.· Exports rise despite still-lower-than-usual shipments from San Francisco and Mobile, Alabama; these likely consist mostly of term volumes.· Exports rise because of pick-up in shipments from Houston-Galveston and New Orleans; these could include more spot volumes..· Rise in shipments from Houston-Galveston and New Orleans lifts their share of total exports to Europe to six-month high.· Rise in shipments from those other sources coincides with increasingly wide premium of Europe Group II prices to US domestic prices..· Widening price-premium boosts attraction of moving additional arbitrage shipments to Europe.· Higher US base oils exports to Europe could get further boost if shipments from San Francisco and Mobile, Alabama revert to more typical levels..· Lower-than-usual exports from those districts in recent months coincides with plant-maintenance work in Q2 2025..US’ May base oils exports to Europe rise.US’ May base oils exports rise.US’ May base oils imports fall.Americas/EMEA base oils demand outlook: Week of 14 July.Global base oils margins outlook: Week of 14 July.Global base oils arb outlook: Week of 14 July
