· US base oils prices hold in narrow range versus feedstock prices..· Steady Group II margins contrast with sharper fall in margins in H2 Sept 2024.· Steady Group II margins sustain incentive for refiners to maintain high output levels.· Higher output would cushion impact of upcoming plant-maintenance.· Open arbitrage to multiple destinations points to persistent surplus supply even with upcoming plant-maintenance.· Weaker US light-grade prices relative to prices in overseas markets suggests surplus-supply now extending to those grades, in addition to heavy grades..· Resumption of Group I shipments to Nigeria in Sept 2025 follows pause in such flows in recent months.· Resumption of shipments points to rise in surplus Group I volumes to clear..· US Group III base oils supply likely to get boost from resumption of steady flows from Middle East.· Resumption of steady flows follows slump in such shipments in early-Q3 2025 because of plant-maintenance work in Middle East.· Resumption of steady flows follows completion of that maintenance-work.· Shipments from Middle East add to increasingly rangebound shipments from South Korea to US in recent months..· Steady flows from South Korea and resumption of shipments from Middle East already raise prospect of rebound in US Group III imports in Sept 2025.· Trend likely to continue over coming months unless shipments from Middle East or South Korea are diverted to other markets instead.· Lower US Group III base oils prices could incentivize such moves.· US Group III price-discount to Europe Group III prices widens further in Sept 2025..· Widening discount increases incentive to move more Group III shipments to markets like Europe rather than US..· Latin America’s base oils supply likely to stay sufficient, curbing any urgency to lock in additional volumes.· Supply set to get boost from pick-up in US shipments reaching Brazil and Argentina in Sept 2025.· Persistent signs of Latin America’s balanced-to-tight supply in recent months suggest that blenders are comfortable maintaining lower stocks.· Brazil’s base oils imports fall to six-month low in Aug 2025 amid dip in shipments from US..· Fall in imports follows rise in Brazil’s net supply in three of last four months to July 2025.· Fall in imports likely helps to reverse any build-up of surplus supplies, keeping inventories relatively balanced..· Europe’s base oils prices hold at levels that sustain incentive for refiners to maintain high output or boost supplies in the region.· Dynamic would add to signs of already-readily-available supply of most grades.· More feasible arbitrage and pick-up in Group I exports in Q3 2025 could limit size of Europe’s surplus Group I supply heading into Q4 2025.· Europe’s Group I base oils exports to markets outside the region rise to six-month high in July 2025..· Pick-up in exports helps to cushion impact of seasonal slowdown in demand and rise in supply in markets like Italy.· Italy’s base oils output extends rise to thirteen-month high in July 2025..· Fall in Europe Group I prices relative to markets like Middle East and southeast Asia in recent weeks helps to facilitate additional arbitrage shipments..· Rise in exports and more feasible arbitrage points to pick-up in surplus supplies to clear.· Rise in exports and more feasible arbitrage help to remove those volumes..· Europe’s Group II base oils supply could be more manageable amid firmer demand and slowdown in imports in Q3 2025.· Europe’s imports from key sources of Group II base oils fall to three-month low in July 2025 on dip in shipments from US..· Imports likely stayed lower in Aug 2025 after US base oils exports to Europe stay lower in July 2025 for second month.· Europe’s Group II base oils prices maintain steeper-than-usual premium to Group I base oils through H1 Sept 2025..· Firmer prices points to firmer supply-demand fundamentals for the premium-grade supplies.· Europe’s lower Group II imports and higher Group I exports in early-Q3 2025 point to such a dynamic..· Europe’s Group III base oils supply could improve in Oct 2025 amid arrival of more shipments from Middle East.· Slowdown in shipments from Middle East earlier in Q3 shows signs of keeping Europe’s Group III base oils supply lower in Sept 2025.· Seasonal recovery in regional demand at end of third quarter magnifies impact of any supply-tightness.· Europe’s Group III base oils prices rise relative to prices in US and Asia in recent weeks..· Firmer price differentials point to signs of tighter fundamentals.· Europe Group III price-differentials hold steadier earlier in Q3 2025, when Group III base oils supply holds firmer..· Firmer supply earlier in Q3 2025 coincides with seasonal slowdown in demand, cushioning impact of plant-maintenance work in Middle East.· A more sustained recovery in Group III supply from start of Q4 2025 could require firmer demand to maintain tighter fundamentals that support current price-differentials..Global exports to Africa fall in July.S Korea's Aug exports to Americas stay lower.Europe’s July Group III base oils supply rises.Global exports to Mideast Gulf fall in August.Americas/EMEA base oils demand outlook: Week of 22 September.Base Oil News stories and analysis also available on ICIS platform
