· US base oils prices hold steady versus feedstock/diesel prices at time of year when they usually face more downward pressure.· Steadier base oils values in recent weeks curb pressure on refiners to trim output at time of year when demand faces seasonal slowdown.· Steadier output would increase risk of build-up of surplus supplies.· Steadier output could also point to signs of more manageable supplies at year-end.· Scheduled and unexpected plant maintenance work in Q4 2024, combined with firm export volumes, likely slow pace of supply-build at year-end.· Signs of dip in base oils imports in Dec 2024 could curb further size of supply-build..· US base oils/lube exports stay unusually high in Oct 2024 despite plant maintenance during the month..· Rise in exports and likely drop in domestic base oils output likely cuts US’ surplus supply in early-Q4 2024.· Any signs of more balanced supply would curb pressure on refiners to trim prices or production levels.· Rise in exports points to preference to maintain rather than cut output, and to move surplus volumes to overseas markets even if at discounted prices..· US base oils exports rise strongly to markets like South America and Africa in Oct 2024, fall to Europe..· Trend points to moves to clear surplus cargoes at discounted prices through other outlets.· Trend curbs prospect of Europe facing large supply-build and downward pressure on prices in response..· US refiners’ ability to clear surplus supplies through export markets contrasts with more limited leverage to control country’s base oils imports.· US base oils imports could be more volatile in Q4 2024, with shipments in Dec 2024 so far lagging a likely jump in imports in Nov 2024.· Any rebound in shipments in Nov 2024 follows dip in imports in Oct 2024..· Dynamic highlights role of base oils imports as key determinant for size of any build-up of surplus supplies in US at year-end.· Dynamic also suggests Group III base oils likely to consist of larger share of any large build-up of supplies..· Europe’s base oils supply-build could be smaller than usual at year-end and start of next year.· Volume of Group I supply that sellers need to clear through overseas markets could be smaller than usual at end-2024, with Italy’s output falling to sixteen-month low in Oct 2024..· Italy is typically key source of Europe’s surplus Group I base oils supplies to clear at year-end, especially for brightstock.· Slump in Italy's output and stocks instead likely to curb volume of such surplus supplies this year.· Europe’s Group I brightstock prices strengthen versus VGO, versus SN 500 and versus export prices in Q4 2024..· Brightstock price-strength points to tighter-than-usual availability of the grade at year-end.. · Europe’s Group II base oils supply could slip in Q4 2024 amid signs of slowdown in US shipments to the region.· US base oils exports to Europe fall to twenty-two month low in Oct 2024..· Dip in shipments likely reflects impact of plant maintenance in US in Oct 2024.· Dip in shipments raises prospect of drop in Europe’s Group II supplies from US in Q4 2024.· Drop in Group II supplies would cushion impact of seasonal slowdown in demand in Q4 2024.· Smaller supply-build in Q4 2024 would ease downward price-pressure at year-end and in early 2025..· Europe Group II price premium to US export prices steadies over past month at lower levels than same time last year..· Lower price premium curbs attraction of moving arbitrage shipments to Europe.· Any such trend could limit further size of any build-up of Group II supplies at end-2024/early 2025..· Europe’s supply of Group III base oils with full set of OEM approvals likely to get boost from pick-up in shipments from Spain in recent and coming weeks.· Supply likely to get further boost from rise in shipments from Indonesia to Europe in Oct 2024 to highest level in more than five years..· Rise in Group III base oils exports balances out pause in shipments from Indonesia to Europe in Sept 2024, adds to recovery in regional supply at year-end..Global base oils margins outlook: Week of 16 Dec.Global base oils arb outlook: Week of 16 Dec.Asia base oils demand outlook: Week of 16 Dec.Asia base oils supply outlook: Week of 16 Dec.Americas/EMEA base oils demand outlook: Week of 16 Dec.US’ Oct base oils exports to Europe fall.Italy’s October base oils output falls.US’ October base oils imports fall
