· US base oils price premium to feedstock/competing fuel prices extends fall.· Domestic/export price premium stays at level that incentivizes refiners to maintain higher output levels for now.· Output shows signs of staying lower despite firm margins.· Pick-up in US surplus supply could also be smaller than expected at start of Q4 2024 despite firm margins.· Surplus supply could be smaller after steady flow of shipments to markets like West Africa, Turkey and India during Q3 2024.· Trend shows signs of extending into early-Q4 2024..· US base oils/lube exports rebound to five-month high in Aug 2024, reflecting that trend..· Exports include surge in shipments to Africa to multi-year high..· Rise in shipments to markets like Africa points to moves to start clearing surplus volumes well before end of Q3 2024.· The moves raise prospect of leaving smaller-than-expected build-up of surplus volumes in Q3 2024.· Scheduled and unexpected plant maintenance in US at start of Q4 2024 set to cut base oils output, cushioning impact of slowdown in demand.· Prospect of lower-than-expected supply-surplus at end-Q3 2024 and drop in output at start of Q4 2024 could delay any need or moves to clear larger surplus volumes..· US base oils imports fall to three-month low in Aug 2024..· Drop in shipments adds to prospect of lower supply in Aug 2024 and smaller surplus at end-Q3 2024.· US base oils imports from South Korea stay higher than usual in Aug 2024, contrasting with further slide in shipments from Middle East..· Contrasting flows reverse trend of rising shipments from Middle East and slump in imports from South Korea in H1 2024.· Contrasting flows could suggest lower US Group III prices have more impact on supplies from Middle East than from South Korea.· Contrasting flows coincide with signs of more widespread slowdown in shipments from Qatar in July-Aug 2024.· US and Asia imports from Qatar combined fall to eleven-month low in Aug 2024..· Imports fall from already-lower-than-usual volume in July 2024.· Sustained slowdown in shipments from Qatar is unusual..· US base oils imports in Aug 2024 include largest-ever shipment from Saudi Arabia..· Rise in imports follows shipment of large cargo from Saudi Arabia to Argentina in Q3 2024 and rise in flows to southeast Asia.· Trend could point to moves by Saudi Arabia to diversify its outlets and trim flow of supplies to UAE and India..· Europe’s Group I base oils supply could be more balanced as recent pick-up in shipments to markets like West Africa removes some surplus volumes.· Recent production issues and upcoming plant maintenance work could trim supply further.· Less attractive arbitrage could prompt more overseas Group I shipments to move to other markets rather than to Europe.· Removal of surplus shipments follows signs of rise in stocks in Q3 2024 as weak demand outweighs lower output in markets like Italy.· Italy’s base oils stocks rise to three-month high even as output falls to lowest this year..· Contrasting trends reflect slump in Italy’s base oils consumption.· Weakness of base oils demand partly reflects steep fall in domestic lube consumption in Aug 2024.· Weakness also points to more muted overseas demand even amid dwindling availability of Group I base oils.· Trend points to structural fall in demand for Group I base oils, leaving Europe’s refiners facing build-up of surplus supplies even with lower structural supply and drop in output.· Trend leaves Europe’s refiners facing build-up of surplus supplies..· Europe’s Group II base oils supply could face less upward pressure if shipments from US stay lower.· US base oils exports to Europe fall in Aug 2024, contrasting with rise in US shipments to Africa..· Contrasting trends curb prospect of large supply-build in Europe.· Prospect of more limited supply-build eases pressure on Europe’s Group II prices.· Europe’s firm Group II prices support rise in premium to US prices to highest since March 2024, making arbitrage increasingly attractive.· US engine oils exports to Europe see unusual surge in Aug 2024 even before recent rebound in Group II premium to US prices..· Europe’s supply of Group III base oils with full set of OEM approvals could tighten because of scheduled plant maintenance work.· Spain’s exports of premium-grade base oils to northwest Europe included at least one large cargo in first half of each month since March 2024.· There were no such shipments so far in H1 Oct 2024..Americas/EMEA base oils demand outlook: Week of 14 Oct.Asia base oils supply outlook: Week of 14 Oct.Global base oils margins outlook: Week of 14 Oct.US’ August base oils exports rise.US’ Aug base oils exports to Europe fall.US’ Aug base oils imports mixed.Italy’s August base oils stocks rise
· US base oils price premium to feedstock/competing fuel prices extends fall.· Domestic/export price premium stays at level that incentivizes refiners to maintain higher output levels for now.· Output shows signs of staying lower despite firm margins.· Pick-up in US surplus supply could also be smaller than expected at start of Q4 2024 despite firm margins.· Surplus supply could be smaller after steady flow of shipments to markets like West Africa, Turkey and India during Q3 2024.· Trend shows signs of extending into early-Q4 2024..· US base oils/lube exports rebound to five-month high in Aug 2024, reflecting that trend..· Exports include surge in shipments to Africa to multi-year high..· Rise in shipments to markets like Africa points to moves to start clearing surplus volumes well before end of Q3 2024.· The moves raise prospect of leaving smaller-than-expected build-up of surplus volumes in Q3 2024.· Scheduled and unexpected plant maintenance in US at start of Q4 2024 set to cut base oils output, cushioning impact of slowdown in demand.· Prospect of lower-than-expected supply-surplus at end-Q3 2024 and drop in output at start of Q4 2024 could delay any need or moves to clear larger surplus volumes..· US base oils imports fall to three-month low in Aug 2024..· Drop in shipments adds to prospect of lower supply in Aug 2024 and smaller surplus at end-Q3 2024.· US base oils imports from South Korea stay higher than usual in Aug 2024, contrasting with further slide in shipments from Middle East..· Contrasting flows reverse trend of rising shipments from Middle East and slump in imports from South Korea in H1 2024.· Contrasting flows could suggest lower US Group III prices have more impact on supplies from Middle East than from South Korea.· Contrasting flows coincide with signs of more widespread slowdown in shipments from Qatar in July-Aug 2024.· US and Asia imports from Qatar combined fall to eleven-month low in Aug 2024..· Imports fall from already-lower-than-usual volume in July 2024.· Sustained slowdown in shipments from Qatar is unusual..· US base oils imports in Aug 2024 include largest-ever shipment from Saudi Arabia..· Rise in imports follows shipment of large cargo from Saudi Arabia to Argentina in Q3 2024 and rise in flows to southeast Asia.· Trend could point to moves by Saudi Arabia to diversify its outlets and trim flow of supplies to UAE and India..· Europe’s Group I base oils supply could be more balanced as recent pick-up in shipments to markets like West Africa removes some surplus volumes.· Recent production issues and upcoming plant maintenance work could trim supply further.· Less attractive arbitrage could prompt more overseas Group I shipments to move to other markets rather than to Europe.· Removal of surplus shipments follows signs of rise in stocks in Q3 2024 as weak demand outweighs lower output in markets like Italy.· Italy’s base oils stocks rise to three-month high even as output falls to lowest this year..· Contrasting trends reflect slump in Italy’s base oils consumption.· Weakness of base oils demand partly reflects steep fall in domestic lube consumption in Aug 2024.· Weakness also points to more muted overseas demand even amid dwindling availability of Group I base oils.· Trend points to structural fall in demand for Group I base oils, leaving Europe’s refiners facing build-up of surplus supplies even with lower structural supply and drop in output.· Trend leaves Europe’s refiners facing build-up of surplus supplies..· Europe’s Group II base oils supply could face less upward pressure if shipments from US stay lower.· US base oils exports to Europe fall in Aug 2024, contrasting with rise in US shipments to Africa..· Contrasting trends curb prospect of large supply-build in Europe.· Prospect of more limited supply-build eases pressure on Europe’s Group II prices.· Europe’s firm Group II prices support rise in premium to US prices to highest since March 2024, making arbitrage increasingly attractive.· US engine oils exports to Europe see unusual surge in Aug 2024 even before recent rebound in Group II premium to US prices..· Europe’s supply of Group III base oils with full set of OEM approvals could tighten because of scheduled plant maintenance work.· Spain’s exports of premium-grade base oils to northwest Europe included at least one large cargo in first half of each month since March 2024.· There were no such shipments so far in H1 Oct 2024..Americas/EMEA base oils demand outlook: Week of 14 Oct.Asia base oils supply outlook: Week of 14 Oct.Global base oils margins outlook: Week of 14 Oct.US’ August base oils exports rise.US’ Aug base oils exports to Europe fall.US’ Aug base oils imports mixed.Italy’s August base oils stocks rise
