· US base oils demand could get support from expectations of steady-to-higher prices following surge in crude oil prices.· Weakening supply-demand fundamentals previously put pressure on adjustment in base oils prices to reflect that dynamic.· Concern about exposure to lower prices incentivized buyers to limit their procurement plans.· Reduced concern about lower prices incentivizes buyers to maintain steady procurement plans.· Those plans likely include procuring additional volumes to cover for any weather-related supply disruptions during Atlantic hurricane season.· Overseas demand in more distant markets for US supplies could be more muted as buyers and sellers hold back because of concern about price volatility..· US Group III base oils demand could get support from concern about tighter supplies and higher prices.· Group III imports from Middle East rise to seven-month high in April 2025, account for more than 65% of total US Group III imports..· US’ reliance on Middle East for most of its Group III supplies magnifies impact of plant-maintenance work in the region in Q2 2025.· Maintenance work coincides with signs of slowdown in US imports from Middle East in May-June 2025.· Plant-maintenance in South Korea in Q2 2025 complicates US buyers’ ability to line up additional volumes from that source to cushion slowdown in supplies from Middle East..· Latin America’s base oils demand could be more muted following surge in US exports to the region in March-April 2025..· Surge in shipments helps to replenish regional blenders’ stocks at a time when demand shows signs of ebbing in key markets like Brazil.· Lower consumption leaves stocks lasting longer, incentivizes blenders to maintain lower inventories.· Expectations of pick-up in surplus US supplies in coming months could add to preference to hold back.· Signs of persistent flow of surplus US shipments to other markets rather than to South America could conversely support steadier buying interest..· Europe’s base oils demand likely to stay cautious as buyers seek sufficient volumes to cover requirements while limiting any build-up of additional supplies.· Lube consumption growth stays mixed in early Q2 2025, adding to attraction of maintaining lower stocks.· Spain’s lube consumption falls in April 2025 from year-earlier levels, contrasting with rise in demand in other markets like Italy and Portugal..· Base oils supply likely to improve in coming weeks as plant maintenance draws to a close.· Prospect of improving supply and seasonal slowdown in demand in third quarter adds to attraction of procuring smaller volumes on a need-to basis.· Blenders’ lower stocks could magnify market impact of base oils grades facing tighter availability..· Demand for Group I SN 500 could get support from its increasingly wide discount to Group II heavy grades..· Wide discount could reflect blenders’ switch to using more Group II heavy grades in response to tight availability of Group I SN 500.· Any pick-up in availability of Group I SN 500 could reverse that dynamic.· Europe Group II heavy-grade price-premium to US and Asia prices stays wider than usual..· Wide premium points to strong demand and tight availability of Group II heavy grades, boosts attraction of moving more of those supplies to Europe..Global base oils margins outlook: Week of 16 June.Global base oils arb outlook: Week of 16 June.Asia base oils demand outlook: Week of 16 June.US April base oils exports to S America stay high.US’ April base oils imports hold firm
