· US Group II base oils price-premium to VGO rebounds after fall in crude oil prices.· Excluding brief dip in June 2025, base oils margins hold in narrow range since early April 2025.· US Group II domestic and export base oils price-premium to VGO rises in Q2 2025 from Q1 2025..· Higher base oils premium to VGO points to support from firmer supply-demand fundamentals and from extended round of plant-maintenance in Q2 2025.· Rise in US Group II export base oils price-premium to VGO in Q2 2025 is smaller than rise in base oils premium in Q2 2024 vs Q1 2024.· Smaller increase in price-premium in Q2 2025 partly reflects already-firm base oils premium in Q1 2025.· Firmer export base oils price-premium in Q1 2025 partly reflects sustained flow of cargoes to overseas markets, curbing supply-build in US before springtime pick-up in demand.· US Group II export price-premium to VGO at end-Q2 2025 is similar to price-premium at end-Q2 2024, pointing to still-firm fundamentals.· US Group II export prices maintain steep discount to prices in Europe and India at end-Q2 2025, especially for heavy grades..· US export prices maintain discount even as US price-premium to VGO holds firm.· Group II heavy-grade price-discount contrasts with US price-premium to India/Europe prices at end-Q2 2024.· Steep price-discount at end-Q2 2025 facilitates moves to line up arbitrage shipments if surplus supply builds.· Export price-premium to overseas markets this time last year complicated such moves.· Dynamic incentivizes US refiners to maintain higher output levels heading into Q3 2025..· Latin America’s base oils supply likely holds at healthy levels through Q2 2025.· Healthy supplies would leave buyers’ inventories at higher levels, curbing any urgency to lock in additional volumes.· Signs of weakening lube demand add to incentive to avoid any large supply-build.· Brazil’s base oils output stays firm in May 2025, remaining in a narrow range it has mostly held in since early-2024..· Supply likely to be supplemented with wave of shipments from US to Brazil throughout Q2 2025..· Europe’s Group I base oils supply likely to improve in coming weeks as plant-maintenance draws to a close and demand faces seasonal slowdown.· Pick-up in supply follows sharp dip in output amongst region’s key refiners at start of Q2 2025 to lowest in almost two years..· Lower output at start of Q2 2025 masks early signs of recovery in some markets like Italy.· Italy’s base oils output likely extends recovery in May-June 2025 after edging up in April 2025, pointing to completion of plant-maintenance work.· Rise in output follows cessation of production in March 2025..· Lower output in Feb-April 2025 precedes sharp slowdown in shipments from Europe reaching Singapore in Q2 2025..· Pick-up in cargo-loadings from Europe to Singapore in recent weeks should at least partially reverse that trend in coming weeks.· Expected rise in Singapore’s base oils production capacity in coming months could conversely start to curb its requirements for additional supplies from Europe.· Scenario would leave Europe with additional volumes that it would need to place in other markets..· Europe’s Group II base oils prices maintain steep premium to prices in US and Asia..· Firm Group II prices point to firmer supply-demand fundamentals in Europe than in those other markets, especially for heavy grades.· Firm prices incentivize shipment of more Group II supplies to Europe.· Any such pick-up in shipments would coincide with signs of steady regional output of premium-grade base oils..· Europe’s supply of Group III base oils with full set of OEM approvals shows signs of staying tighter in June 2025 after already dipping in May 2025.· Supplies from Spain to northwest Europe slip further in June 2025..· Slowdown in shipments from Spain contrasts with steady flows from South Korea to northwest Europe in April-May 2025..· Signs of pick-up in arrival of cargoes from Bahrain in May-June 2025 add to Europe’s Group III supply.· Pick-up in Group III cargo-loadings from UAE in recent weeks, following slowdown in May 2025, includes shipment bound for Europe.· Dynamic points to recovery in supply of Group III base oils without full set of OEM approvals, and tighter availability of Group III supplies with full set of OEM approvals..Americas/EMEA base oils demand outlook: Week of 30 June.Asia base oils supply outlook: Week of 30 June.Global base oils margins outlook: Week of 30 June.Global base oils arb outlook: Week of 30 June.Europe April Grp III base oils supply falls
