· US base oils demand likely to get boost from blenders’ moves to build stocks ahead of seasonal pick-up in consumption.· Steady prices and more manageable supply-surplus in early-2025 ease concern about exposure to lower prices, removing deterrence to holding back.· More balanced fundamentals would also cushion against any pressure from lower feedstock costs.· Typical rise in prices during spring oil-change period instead adds to incentive to lock in supplies at current prices.· US base oils export prices maintain narrower discount to domestic prices compared with Q1 2024..· Narrower export-price discount provides further support for steady-to-firmer domestic prices.· Concerns about strength of pick-up in demand could support ongoing caution.· Uncertainty about possibility, timing, and impact of tariffs on domestic and overseas lube demand boosts attraction of limiting size of any stock-build.· Uncertainty boosts attraction of procuring smaller volumes more frequently.· Uncertainty, and possibility of smaller seasonal pick-up in demand in response, could curb refiners’ leverage to adjust prices..· Europe’s demand for Group II base oils from the US could stay lower early this year as regional output covers more of that market’s requirements.· Slump in Europe's output in early 2024 coincided with open arbitrage and surge in the region’s imports from US in Q2 2024..· Rise in imports provided US refiners with attractive outlet for larger volume of their supplies.· Likely lack of any repeat of that scenario this year would leave US refiners needing to target other markets instead..· Latin America’s base oils demand likely to get support from tighter supply at end-2024 combined with firm consumption in early-2025.· Brazil’s base oils demand likely to hold firm after lube consumption extends rise in Jan 2025..· Rising demand puts more pressure on Brazil’s tighter base oils supply-balance, especially vs Q1 2024.· Concern about slowdown in Brazil’s economic growth, and expectations of more plentiful surplus base oils supply in US, instead incentivize blenders to hold back early this year.· Rising domestic demand and delayed replenishment moves raise prospect of further squeezing Brazil’s supply-balance..· Argentina’s lube demand rises in Jan 2025 for second time in three months and at fastest pace in more than a year..· Pick-up in Argentina's economic activity raises prospect of supporting extended recovery in lube consumption.· Rising demand would boost requirements for additional base oils supplies, especially from US.· Rising demand could complicate increasingly regular flow of Group I base oils shipments from Argentina to Brazil unless domestic output rises accordingly..· Peru’s base oils and lube imports rise in Jan 2025 for fourth month from year-earlier levels..· More than 95% of Peru’s base oils imports originate from US in Dec 2024 and Jan 2025, with scant volumes from South Korea.· Trend coincides with less feasible arbitrage from Asia to Americas, highlights Latin America’s larger reliance on US for its overseas supplies..· Chile’s base oils/lube imports fall in Jan 2025 for second month from year-earlier levels..· Imports dip even amid signs of firmer economic growth in Chile at end-2024..· Europe’s base oils demand likely to get support from seasonal pick-up in requirements.· Europe’s weak lube demand meanwhile incentivizes blenders to maintain low stocks.· Italy’s lube demand falls in Jan 2025 for sixth month, reflecting extension of weak consumption into start of this year..· Blenders’ low stocks increase their need to replenish inventories more frequently.· Blenders’ low stocks could magnify impact of factors such as seasonal rise in consumption.· Expectations of sufficient base oils supply raise prospect of limiting size of seasonal pick-up in requirements..· Premium of domestic Europe Group I brightstock over US prices widens to highest since July 2024..· Widening premium boosts attraction of moving more US brightstock shipments to Europe.· Dynamic highlights firm demand and tighter regional availability of the heavy-grade product.· Any subsequent pick-up in shipments to Europe could curb availability for other markets like West Africa..· Europe's demand for Group II base oils could face pressure from Group III prices whose discount to Group II prices widens further in Feb 2025..· Signs of healthy availability of Group II base oils could add to pressure to make adjustments to boost demand..Asia base oils demand outlook: Week of 3 March.Brazil’s Jan lube demand extends rise.Argentina's January lube demand rises.Netherlands’ Dec base oils output rises.Italy’s January lube demand falls.Global base oils arb outlook: Week of 3 March
· US base oils demand likely to get boost from blenders’ moves to build stocks ahead of seasonal pick-up in consumption.· Steady prices and more manageable supply-surplus in early-2025 ease concern about exposure to lower prices, removing deterrence to holding back.· More balanced fundamentals would also cushion against any pressure from lower feedstock costs.· Typical rise in prices during spring oil-change period instead adds to incentive to lock in supplies at current prices.· US base oils export prices maintain narrower discount to domestic prices compared with Q1 2024..· Narrower export-price discount provides further support for steady-to-firmer domestic prices.· Concerns about strength of pick-up in demand could support ongoing caution.· Uncertainty about possibility, timing, and impact of tariffs on domestic and overseas lube demand boosts attraction of limiting size of any stock-build.· Uncertainty boosts attraction of procuring smaller volumes more frequently.· Uncertainty, and possibility of smaller seasonal pick-up in demand in response, could curb refiners’ leverage to adjust prices..· Europe’s demand for Group II base oils from the US could stay lower early this year as regional output covers more of that market’s requirements.· Slump in Europe's output in early 2024 coincided with open arbitrage and surge in the region’s imports from US in Q2 2024..· Rise in imports provided US refiners with attractive outlet for larger volume of their supplies.· Likely lack of any repeat of that scenario this year would leave US refiners needing to target other markets instead..· Latin America’s base oils demand likely to get support from tighter supply at end-2024 combined with firm consumption in early-2025.· Brazil’s base oils demand likely to hold firm after lube consumption extends rise in Jan 2025..· Rising demand puts more pressure on Brazil’s tighter base oils supply-balance, especially vs Q1 2024.· Concern about slowdown in Brazil’s economic growth, and expectations of more plentiful surplus base oils supply in US, instead incentivize blenders to hold back early this year.· Rising domestic demand and delayed replenishment moves raise prospect of further squeezing Brazil’s supply-balance..· Argentina’s lube demand rises in Jan 2025 for second time in three months and at fastest pace in more than a year..· Pick-up in Argentina's economic activity raises prospect of supporting extended recovery in lube consumption.· Rising demand would boost requirements for additional base oils supplies, especially from US.· Rising demand could complicate increasingly regular flow of Group I base oils shipments from Argentina to Brazil unless domestic output rises accordingly..· Peru’s base oils and lube imports rise in Jan 2025 for fourth month from year-earlier levels..· More than 95% of Peru’s base oils imports originate from US in Dec 2024 and Jan 2025, with scant volumes from South Korea.· Trend coincides with less feasible arbitrage from Asia to Americas, highlights Latin America’s larger reliance on US for its overseas supplies..· Chile’s base oils/lube imports fall in Jan 2025 for second month from year-earlier levels..· Imports dip even amid signs of firmer economic growth in Chile at end-2024..· Europe’s base oils demand likely to get support from seasonal pick-up in requirements.· Europe’s weak lube demand meanwhile incentivizes blenders to maintain low stocks.· Italy’s lube demand falls in Jan 2025 for sixth month, reflecting extension of weak consumption into start of this year..· Blenders’ low stocks increase their need to replenish inventories more frequently.· Blenders’ low stocks could magnify impact of factors such as seasonal rise in consumption.· Expectations of sufficient base oils supply raise prospect of limiting size of seasonal pick-up in requirements..· Premium of domestic Europe Group I brightstock over US prices widens to highest since July 2024..· Widening premium boosts attraction of moving more US brightstock shipments to Europe.· Dynamic highlights firm demand and tighter regional availability of the heavy-grade product.· Any subsequent pick-up in shipments to Europe could curb availability for other markets like West Africa..· Europe's demand for Group II base oils could face pressure from Group III prices whose discount to Group II prices widens further in Feb 2025..· Signs of healthy availability of Group II base oils could add to pressure to make adjustments to boost demand..Asia base oils demand outlook: Week of 3 March.Brazil’s Jan lube demand extends rise.Argentina's January lube demand rises.Netherlands’ Dec base oils output rises.Italy’s January lube demand falls.Global base oils arb outlook: Week of 3 March
