· US base oils prices extend rise vs feedstock/competing fuel prices, sustaining incentive for refiners to maximise base oils output.· US base oils supply could get further boost if buyers hold back until they are comfortable that any further price adjustments have ended.· Supply could rise even more if buyers and distributors start to work down inventories that they built up in recent months rather than procure additional volumes.· Buyers and distributors could hold off or limit any moves to clear inventories for now, with a major storm forecast to reach the US Gulf coast later this week.· Firm US export prices relative to overseas markets could complicate any moves to speed up shipment of surplus supplies to overseas markets.· Even so, recent cargoes to West Africa and to India point to ongoing arbitrage shipments.· Shipments could reflect more wide-ranging export prices.· Shipments could help to trim size of any supply-surplus at end-Q3 2024.· Persistent tightness of Group II light grades relative to other grades could incentivize blenders to turn to alternative supplies instead, such as Group III base oils.· Signs of increasingly ready availability of Group III base oils could support any such moves..· US imports boost their share of total US base oils supply in June 2024 to their highest in a year..· Imports share rises as slump in Group II production in Louisiana cuts US base oils output to five-month low.· Rising imports of Group III base oils and falling output of Group II base oils magnifies contrasting supply fundamentals between the two grades.· US Group III base oils premium to Group II base oils falls in June 2024, extends slide so far in Q3 2024, reflecting those contrasting fundamentals.· Slump in Group III premium boosts incentive for refiners to increase Group II output and to cut Group III base oils output and imports..· Europe’s Group II base oils supply shows signs of holding at firmer levels.· Netherlands’ base oils output rebounds to fourteen-month high in June 2024..· Higher output boosts Europe’s supply of premium-grade base oils in May-June 2024..· Europe’s lower supply of premium-grade base oils for five months to April 2024 reflects region’s reliance on output from Netherlands.· That reliance could be a factor deterring regional blenders from consuming more premium-grade base oils.· Netherlands’ base oils exports rise in H1 2024, adding to squeeze in regional supply..· Higher exports could reflect response to weak regional demand; or it could reflect focus on maintaining or expanding market share in key overseas outlets.· Either way, tighter regional supply of premium-grade base oils incentivizes regional blenders to rely more on supplies whose availability is more stable.· Stability of Europe’s Group I base oils supply in H1 2024 contrasts with lower supply of premium grades, boosting the attraction of Group I..· Europe’s Group I base oils supply likely to get sustained support in Q3 2024 from firm prices relative to diesel and relative to other nearby markets like Turkey.· Turkey’s base oils exports rebound in July 2024 to highest in more than three years, with most of the shipments moving to Greece..· Dynamic highlights impact of Europe’s high Group I prices and the opportunities they generate for suppliers like Turkey.· Boost in supplies from Turkey to Europe helps to cover for Europe’s drop in production capacity and loss of supplies of Russian origin because of sanctions.· Boost in supplies from Turkey to Europe instead party reflects rise in Russian base oils supplies to Turkey.· Some of Turkey’s July exports move to Egypt.· Trend highlights other opportunities for suppliers like Turkey as high prices and tighter Group I supply in Europe curb availability for other markets..· Premium-grade base oils exports from South Korea and Indonesia to Europe rise to three-month high in July 2024, extend surge from year-earlier levels.· Exports add to rebound in shipments from those two markets to Europe in Jan-July 2024..· Rise in shipments from Asia to Europe at start of Q3 2024 helps to boost Europe’s Group III base oils supply.· Exports of premium-grade base oils from Spain rise in August 2024, with firm shipment volumes to northwest Europe..· Shipments from Spain and Asia should help to cushion impact of likely drop in supply from Europe because of planned Group III plant maintenance work..US’ June base oils supply rises.Turkey’s July base oils exports rise.Netherland’s June base oils output rises.Americas/EMEA base oils demand outlook: Week of 9 Sept.Asia base oils supply outlook: Week of 9 Sept.Global base oils margins outlook: Week of 9 Sept.Global base oils arb outlook: Week of 9 Sept
· US base oils prices extend rise vs feedstock/competing fuel prices, sustaining incentive for refiners to maximise base oils output.· US base oils supply could get further boost if buyers hold back until they are comfortable that any further price adjustments have ended.· Supply could rise even more if buyers and distributors start to work down inventories that they built up in recent months rather than procure additional volumes.· Buyers and distributors could hold off or limit any moves to clear inventories for now, with a major storm forecast to reach the US Gulf coast later this week.· Firm US export prices relative to overseas markets could complicate any moves to speed up shipment of surplus supplies to overseas markets.· Even so, recent cargoes to West Africa and to India point to ongoing arbitrage shipments.· Shipments could reflect more wide-ranging export prices.· Shipments could help to trim size of any supply-surplus at end-Q3 2024.· Persistent tightness of Group II light grades relative to other grades could incentivize blenders to turn to alternative supplies instead, such as Group III base oils.· Signs of increasingly ready availability of Group III base oils could support any such moves..· US imports boost their share of total US base oils supply in June 2024 to their highest in a year..· Imports share rises as slump in Group II production in Louisiana cuts US base oils output to five-month low.· Rising imports of Group III base oils and falling output of Group II base oils magnifies contrasting supply fundamentals between the two grades.· US Group III base oils premium to Group II base oils falls in June 2024, extends slide so far in Q3 2024, reflecting those contrasting fundamentals.· Slump in Group III premium boosts incentive for refiners to increase Group II output and to cut Group III base oils output and imports..· Europe’s Group II base oils supply shows signs of holding at firmer levels.· Netherlands’ base oils output rebounds to fourteen-month high in June 2024..· Higher output boosts Europe’s supply of premium-grade base oils in May-June 2024..· Europe’s lower supply of premium-grade base oils for five months to April 2024 reflects region’s reliance on output from Netherlands.· That reliance could be a factor deterring regional blenders from consuming more premium-grade base oils.· Netherlands’ base oils exports rise in H1 2024, adding to squeeze in regional supply..· Higher exports could reflect response to weak regional demand; or it could reflect focus on maintaining or expanding market share in key overseas outlets.· Either way, tighter regional supply of premium-grade base oils incentivizes regional blenders to rely more on supplies whose availability is more stable.· Stability of Europe’s Group I base oils supply in H1 2024 contrasts with lower supply of premium grades, boosting the attraction of Group I..· Europe’s Group I base oils supply likely to get sustained support in Q3 2024 from firm prices relative to diesel and relative to other nearby markets like Turkey.· Turkey’s base oils exports rebound in July 2024 to highest in more than three years, with most of the shipments moving to Greece..· Dynamic highlights impact of Europe’s high Group I prices and the opportunities they generate for suppliers like Turkey.· Boost in supplies from Turkey to Europe helps to cover for Europe’s drop in production capacity and loss of supplies of Russian origin because of sanctions.· Boost in supplies from Turkey to Europe instead party reflects rise in Russian base oils supplies to Turkey.· Some of Turkey’s July exports move to Egypt.· Trend highlights other opportunities for suppliers like Turkey as high prices and tighter Group I supply in Europe curb availability for other markets..· Premium-grade base oils exports from South Korea and Indonesia to Europe rise to three-month high in July 2024, extend surge from year-earlier levels.· Exports add to rebound in shipments from those two markets to Europe in Jan-July 2024..· Rise in shipments from Asia to Europe at start of Q3 2024 helps to boost Europe’s Group III base oils supply.· Exports of premium-grade base oils from Spain rise in August 2024, with firm shipment volumes to northwest Europe..· Shipments from Spain and Asia should help to cushion impact of likely drop in supply from Europe because of planned Group III plant maintenance work..US’ June base oils supply rises.Turkey’s July base oils exports rise.Netherland’s June base oils output rises.Americas/EMEA base oils demand outlook: Week of 9 Sept.Asia base oils supply outlook: Week of 9 Sept.Global base oils margins outlook: Week of 9 Sept.Global base oils arb outlook: Week of 9 Sept
