· US base oils demand likely to get support from seasonal pick-up in requirements in coming weeks.· Avoidance of sharp price correction in recent weeks and signs of more manageable supply surplus during winter months ease concerns about risk of price volatility.· Recent and upcoming plant maintenance likely to further trim any surplus, boosting incentive to lock in requirements.· Expectations that supply likely to remain sufficient, and concern about impact of possible tariffs on end-user demand, could boost attraction of maintaining lower inventories.· Dynamic could limit size of any seasonal boost in demand in coming weeks and instead support more frequent procurement of smaller volumes. .· Latin America’s base oils demand for overseas shipments could revive earlier this year than in 2024 amid signs of smaller build-up of surplus supplies at end-2024.· US base oils exports to South America fall in Dec 2024 to lowest in almost three years..· Slump in exports coincides with and cushions impact of seasonal slowdown in region’s demand at year-end.· Slump in exports cuts subsequent supply-build, raising prospect of buyers needing to replenish stocks earlier this year than in early-2024.· Slump in shipments highlights benefit for US suppliers of clearing surplus supplies at end-2024 into outlets that have more muted impact on outright base oils demand in US' key export markets..· US base oils exports to Brazil fall to two-year low in Dec 2024..· Brazil’s base oils imports account for 60% of its total supply in 2024, highlighting importance of overseas shipments to cover its requirements.· US is Brazil’s largest source of overseas supplies, highlighting magnified impact of drop in shipments from that market..· Latin America’s base oils demand likely to get further support from seasonal pick-up in consumption over coming months..· Rising consumption, tighter base oils supplies in other markets and concern about repercussions of any tariffs could boost demand for base oils supplies from regional refiners.· Regular flow of Group I base oils cargoes from Argentina to Brazil in recent months points to some such moves.· Expansion of any such moves would face limitations because of region’s reliance on overseas markets for premium-grade supplies..· Europe’s base oils demand likely to get seasonal boost in coming weeks.· Relatively steady Group I base oils prices for time of year, and signs of more limited supply surplus, could add to buyers’ willingness to replenish stocks.· Europe’s domestic Group I premium to export prices widens less than usual at end-2024 and already starts to narrow this year..· Europe’s domestic Group I premium to export prices typically widens at year-end and start of new year as export prices fall to help clear surplus supplies.· Smaller domestic Group I premium at end-2024 and narrowing premium earlier this year adds to signs of more limited surplus to clear..· Europe Group III 4cSt (low) price flips to discount to Group II N150 for first time since mid-2021..· Competitiveness of Group III prices could increase attraction for blenders to use formulations that boost consumption of Group III base oils.· Signs of more mixed lube consumption growth in Europe could point to slide in lube demand bottoming out.· Even so, concern about further fall in lube demand and expectations of sufficient base oils supply likely to incentive blenders to carry on maintaining low inventories and to procure supplies more frequently..· Overseas demand for Europe supplies could improve in markets like Middle East in response to tighter availability from Asia in coming months.· Arbitrage to move supplies from Europe to Middle East stays hard to work..· Signs of more limited surplus Group I supply and firmer prices in Europe puts onus on larger adjustment in prices in Middle East to make arbitrage more feasible.· Ongoing flow of shipments from US to West Africa likely to curb that region’s requirements for spot volumes from Europe..· Turkey’s Group I base oils imports from Russia rise to nine-year high in Dec 2024..· Steep price discount of supplies from Russia versus supplies from Europe sustains attraction for buyers in Turkey to procure more shipments of Russian origin..· Surge in shipments from Russia curbs feasibility of Turkey as outlet for surplus supplies from Europe at year-end..Asia base oils demand outlook: Week of 17 Feb.Asia base oils supply outlook: Week of 17 Feb.Global base oils margins outlook: Week of 17 Feb.Global base oils arb outlook: Week of 17 Feb.Global base oils cargo flows: Week of 17 Feb
· US base oils demand likely to get support from seasonal pick-up in requirements in coming weeks.· Avoidance of sharp price correction in recent weeks and signs of more manageable supply surplus during winter months ease concerns about risk of price volatility.· Recent and upcoming plant maintenance likely to further trim any surplus, boosting incentive to lock in requirements.· Expectations that supply likely to remain sufficient, and concern about impact of possible tariffs on end-user demand, could boost attraction of maintaining lower inventories.· Dynamic could limit size of any seasonal boost in demand in coming weeks and instead support more frequent procurement of smaller volumes. .· Latin America’s base oils demand for overseas shipments could revive earlier this year than in 2024 amid signs of smaller build-up of surplus supplies at end-2024.· US base oils exports to South America fall in Dec 2024 to lowest in almost three years..· Slump in exports coincides with and cushions impact of seasonal slowdown in region’s demand at year-end.· Slump in exports cuts subsequent supply-build, raising prospect of buyers needing to replenish stocks earlier this year than in early-2024.· Slump in shipments highlights benefit for US suppliers of clearing surplus supplies at end-2024 into outlets that have more muted impact on outright base oils demand in US' key export markets..· US base oils exports to Brazil fall to two-year low in Dec 2024..· Brazil’s base oils imports account for 60% of its total supply in 2024, highlighting importance of overseas shipments to cover its requirements.· US is Brazil’s largest source of overseas supplies, highlighting magnified impact of drop in shipments from that market..· Latin America’s base oils demand likely to get further support from seasonal pick-up in consumption over coming months..· Rising consumption, tighter base oils supplies in other markets and concern about repercussions of any tariffs could boost demand for base oils supplies from regional refiners.· Regular flow of Group I base oils cargoes from Argentina to Brazil in recent months points to some such moves.· Expansion of any such moves would face limitations because of region’s reliance on overseas markets for premium-grade supplies..· Europe’s base oils demand likely to get seasonal boost in coming weeks.· Relatively steady Group I base oils prices for time of year, and signs of more limited supply surplus, could add to buyers’ willingness to replenish stocks.· Europe’s domestic Group I premium to export prices widens less than usual at end-2024 and already starts to narrow this year..· Europe’s domestic Group I premium to export prices typically widens at year-end and start of new year as export prices fall to help clear surplus supplies.· Smaller domestic Group I premium at end-2024 and narrowing premium earlier this year adds to signs of more limited surplus to clear..· Europe Group III 4cSt (low) price flips to discount to Group II N150 for first time since mid-2021..· Competitiveness of Group III prices could increase attraction for blenders to use formulations that boost consumption of Group III base oils.· Signs of more mixed lube consumption growth in Europe could point to slide in lube demand bottoming out.· Even so, concern about further fall in lube demand and expectations of sufficient base oils supply likely to incentive blenders to carry on maintaining low inventories and to procure supplies more frequently..· Overseas demand for Europe supplies could improve in markets like Middle East in response to tighter availability from Asia in coming months.· Arbitrage to move supplies from Europe to Middle East stays hard to work..· Signs of more limited surplus Group I supply and firmer prices in Europe puts onus on larger adjustment in prices in Middle East to make arbitrage more feasible.· Ongoing flow of shipments from US to West Africa likely to curb that region’s requirements for spot volumes from Europe..· Turkey’s Group I base oils imports from Russia rise to nine-year high in Dec 2024..· Steep price discount of supplies from Russia versus supplies from Europe sustains attraction for buyers in Turkey to procure more shipments of Russian origin..· Surge in shipments from Russia curbs feasibility of Turkey as outlet for surplus supplies from Europe at year-end..Asia base oils demand outlook: Week of 17 Feb.Asia base oils supply outlook: Week of 17 Feb.Global base oils margins outlook: Week of 17 Feb.Global base oils arb outlook: Week of 17 Feb.Global base oils cargo flows: Week of 17 Feb
