· US base oils supply likely to rise in face of softening demand and margins that remain firm even after recent jump in feedstock prices.· Another storm forms in US Gulf of Mexico, is forecast to reach Florida by mid-week.· Recent pick-up in storms highlights why US base oils companies built stocks in recent months as buffer against weather-related disruptions.· Recent pick-up in storms could prompt some companies to slow the pace of any stock-drawdown. · US base oils prices remain at levels that complicate arbitrage opportunities and incentivize refiners to maintain or raise output even after recent drop in prices.· Those factors could curb the pace of any drawdown of surplus supplies.· Surplus supplies will likely get increasingly harder to clear over coming weeks as market starts to prepare for year-end slowdown..· Firm margins and less feasible arbitrage were key factors that supported rise in US base oils supply to two-year high in July 2024..· Rise in supply facilitates moves to build stocks during Atlantic hurricane season.· Rise in supply and lack of any major supply disruptions in Q3 2024 now leaves market facing larger volumes to clear at start of Q4 2024.· Steady flow of US cargoes moves to markets like India and Nigeria in recent weeks.· Shipments likely to partially cushion impact of slower domestic demand, curbing pace of any supply-build..· Brazil’s base oils supply barely covers demand in Aug 2024, extending trend throughout most of this year..· Dynamic keeps pressure on country’s base oils output and imports to stay at higher levels during first eight months of 2024.· Expected slowdown in demand over coming months would ease pressure on supply to stay at elevated levels.· Supply could remain at elevated levels anyway.· Imports could get boost from likely rise in surplus supplies in US in coming months.· Imports set to get further boost from another shipment from South Korea; cargo is set to arrive in Nov 2024.· Any pick-up in imports would coincide with prospect of steady domestic base oils output..· Europe’s Group I base oils supply shows signs of sufficient availability to cover regional requirements.· Upcoming plant maintenance and recent refinery production issues could curb size of any supply surplus.· Supply avoids kind of pressure that US market faces, with blenders trimming rather than building stocks at start of Q3 2024.· Lack of stock-building and seasonal slowdown in demand incentivizes refiners to trim regional supply to limit build-up of surplus volumes in Q3 2024.· Europe’s Group I base oils supply falls to five-month low in July 2024 mostly because of dip in UK’s base oils output..· Europe’s Group I base oils exports to non-EU markets rebound in July 2024 despite lower supply.· Dynamic points to availability of surplus volumes even with lower supply.· Availability of surplus volumes points to weak regional demand.· Seasonal dip in lube consumption in Aug 2024 and improving availability of premium-grade base oils could have compounded drop in demand for Group I base oils.· Europe’s Group I prices start to weaken relative to Group II/III prices from early-Aug 2024.· Weaker Group I price differentials could reflect such a dynamic..· Europe’s Group II base oils supply likely to be more readily available amid higher regional output and increasingly attractive arbitrage to move more shipments to the region.· Europe’s Group II base oils supply rises to record-high in July 2024 on back of surge in Netherlands’ base oils output and jump in imports..· Supply surges in early Q3 2024 at a time of year when already-weak lube consumption faces additional pressure from seasonal slowdown.· Europe’s Group II base oils prices hold firm vs feedstock prices and Group I prices in Q3 2024.· Firm prices and rising supply point either to pick-up in surplus supply or to rise in demand at expense of other base oils grades..· Surge in Europe’s Group II base oils supply in July 2024 boosts the grade's share of region’s supply to more than 40% of total supply..· Europe Group II supply accounts for largest share of Europe supply for first time since Nov 2023 and for third time ever..· Europe’s supply of Group III base oils with full set of OEM approvals could tighten, with scheduled plant maintenance work likely to trim regional supply.· Spain’s premium-grade base oils exports fall to ten-month low in Sept 2024, even as shipments to northwest Europe hold firm..· Steady shipments to northwest Europe in Sept 2024 could cushion impact of plant maintenance work..Americas/EMEA base oils demand outlook: Week of 7 Oct.Global base oils margins outlook: Week of 7 Oct.Global base oils arb outlook: Week of 7 Oct.Global base oils cargo flows: Week of 7 Oct.Asia base oils supply outlook: Week of 7 Oct.US' July base oils supply rises.Brazil’s August base oils supply falls.Netherlands’ July base oils output rises.UK’s July base oils output falls
· US base oils supply likely to rise in face of softening demand and margins that remain firm even after recent jump in feedstock prices.· Another storm forms in US Gulf of Mexico, is forecast to reach Florida by mid-week.· Recent pick-up in storms highlights why US base oils companies built stocks in recent months as buffer against weather-related disruptions.· Recent pick-up in storms could prompt some companies to slow the pace of any stock-drawdown. · US base oils prices remain at levels that complicate arbitrage opportunities and incentivize refiners to maintain or raise output even after recent drop in prices.· Those factors could curb the pace of any drawdown of surplus supplies.· Surplus supplies will likely get increasingly harder to clear over coming weeks as market starts to prepare for year-end slowdown..· Firm margins and less feasible arbitrage were key factors that supported rise in US base oils supply to two-year high in July 2024..· Rise in supply facilitates moves to build stocks during Atlantic hurricane season.· Rise in supply and lack of any major supply disruptions in Q3 2024 now leaves market facing larger volumes to clear at start of Q4 2024.· Steady flow of US cargoes moves to markets like India and Nigeria in recent weeks.· Shipments likely to partially cushion impact of slower domestic demand, curbing pace of any supply-build..· Brazil’s base oils supply barely covers demand in Aug 2024, extending trend throughout most of this year..· Dynamic keeps pressure on country’s base oils output and imports to stay at higher levels during first eight months of 2024.· Expected slowdown in demand over coming months would ease pressure on supply to stay at elevated levels.· Supply could remain at elevated levels anyway.· Imports could get boost from likely rise in surplus supplies in US in coming months.· Imports set to get further boost from another shipment from South Korea; cargo is set to arrive in Nov 2024.· Any pick-up in imports would coincide with prospect of steady domestic base oils output..· Europe’s Group I base oils supply shows signs of sufficient availability to cover regional requirements.· Upcoming plant maintenance and recent refinery production issues could curb size of any supply surplus.· Supply avoids kind of pressure that US market faces, with blenders trimming rather than building stocks at start of Q3 2024.· Lack of stock-building and seasonal slowdown in demand incentivizes refiners to trim regional supply to limit build-up of surplus volumes in Q3 2024.· Europe’s Group I base oils supply falls to five-month low in July 2024 mostly because of dip in UK’s base oils output..· Europe’s Group I base oils exports to non-EU markets rebound in July 2024 despite lower supply.· Dynamic points to availability of surplus volumes even with lower supply.· Availability of surplus volumes points to weak regional demand.· Seasonal dip in lube consumption in Aug 2024 and improving availability of premium-grade base oils could have compounded drop in demand for Group I base oils.· Europe’s Group I prices start to weaken relative to Group II/III prices from early-Aug 2024.· Weaker Group I price differentials could reflect such a dynamic..· Europe’s Group II base oils supply likely to be more readily available amid higher regional output and increasingly attractive arbitrage to move more shipments to the region.· Europe’s Group II base oils supply rises to record-high in July 2024 on back of surge in Netherlands’ base oils output and jump in imports..· Supply surges in early Q3 2024 at a time of year when already-weak lube consumption faces additional pressure from seasonal slowdown.· Europe’s Group II base oils prices hold firm vs feedstock prices and Group I prices in Q3 2024.· Firm prices and rising supply point either to pick-up in surplus supply or to rise in demand at expense of other base oils grades..· Surge in Europe’s Group II base oils supply in July 2024 boosts the grade's share of region’s supply to more than 40% of total supply..· Europe Group II supply accounts for largest share of Europe supply for first time since Nov 2023 and for third time ever..· Europe’s supply of Group III base oils with full set of OEM approvals could tighten, with scheduled plant maintenance work likely to trim regional supply.· Spain’s premium-grade base oils exports fall to ten-month low in Sept 2024, even as shipments to northwest Europe hold firm..· Steady shipments to northwest Europe in Sept 2024 could cushion impact of plant maintenance work..Americas/EMEA base oils demand outlook: Week of 7 Oct.Global base oils margins outlook: Week of 7 Oct.Global base oils arb outlook: Week of 7 Oct.Global base oils cargo flows: Week of 7 Oct.Asia base oils supply outlook: Week of 7 Oct.US' July base oils supply rises.Brazil’s August base oils supply falls.Netherlands’ July base oils output rises.UK’s July base oils output falls
