· US base oils demand could face less impact from latest rise in refinery posted prices as blenders maintain strategy of keeping low inventories.· Muted reaction of US domestic spot prices to refiners’ higher posted prices point to ongoing availability of sufficient supply at competitive prices.· Expectations of sufficient supply add to attraction of continuing to procure on need-to basis.· US Group III base oils demand could get a boost from the product's fast-narrowing premium to Group II base oils.· Overseas demand for US base oils could ease in response to higher US prices and prospect of improving supply in markets like Asia.· Export price-discount to domestic prices and to prices in key markets like Europe stays relatively wide, even if narrower than in Feb and March 2024.· Still-wide export price discount vs other regions points to importance of ongoing arbitrage shipments to overseas markets..· Latin America’s base oils demand shows signs of steadying in markets like Mexico, falling in Argentina, and holding firm in markets like Chile.· Argentina’s sliding lube demand boosts incentive for domestic blenders to maintain low stocks and to procure on a need-to basis.· Trend cuts total base oils consumption.· Trend simultaneously boosts demand for base oils supplies from domestic sources and cuts demand for base oils supplies from overseas sources.· Argentina’s domestic base oils output accounts for almost 70% of country’s total base oils supply in first two months of 2024, up from 45% share in 2023, reflecting that trend..· Trend magnifies impact of weaker demand on base oils imports.· Trend likely had more impact on US suppliers in Q1 2024, when refiners had large surplus volumes to clear.· Trend likely to have less impact on US suppliers in Q2 2024, when refiners have a smaller surplus to clear..· Chile’s base oils imports rise in Q1 2024 year on year for second straight quarter..· Signs of rising base oils consumption follow a rise in Chile’s monthly economic activity index in Feb 2024 for a second month and at its fastest pace since mid-2022..· Europe’s domestic Group I bright stock price premium to VGO edges up but stays well below year-earlier levels.· Europe’s domestic Group I bright stock premium to SN 500 continues to narrow.· Europe’s domestic Group I bright stock price stays at discount to export prices.· Price weakness points to softer regional demand fundamentals for the product.· Europe’s base oils demand for premium-grade base oils could get a boost amid tightening availability of Group I supplies and increasingly competitive prices of Group II/III base oils.· Europe’s Group II heavy-grade premium to Group I SN 500 falls to lowest level in five months, reflecting that trend.· Overseas demand for Europe’s base oils could ease as higher prices and tighter availability incentivize buyers to turn to other sources instead.· Ongoing surge in shipments from Russia to India curbs further the need for buyers in that market to accept higher prices for supplies of European origin.· Signs of more shipments moving from US to Kenya in recent months contrast with dearth of large cargoes from US to the East African country in recent years.· Europe is typically Kenya’s key base oils supplier..· Turkey’s February base oils imports rise to eleven-month high on rebound in shipments of Group I and premium-grade supplies.· Surge in Turkey’s Group I imports from Italy and Greece follow slump in price of the shipments relative to supplies from Russia..· Turkey’s February imports from Italy rise to nine-month high, exceed shipment volumes from Greece and from Russia.· Imports from Italy face prospect of falling following planned closure of Group I plant in the country.· Any such slowdown would likely increase Turkey’s reliance on Greece and Russia to cover most of its Group I import requirements..· South Africa’s February base oils imports rise 66% year on year, with the Netherlands the largest supplier..· South Africa’s surge in import requirements could provide more opportunities for other suppliers if Europe’s shrinking Group I supply boosts its consumption of Group II base oils instead.· Trend would boost attraction for more supplies from the Netherlands to stay in Europe.· Trend would in turn boost South Africa’s requirements from other sources..Asia base oils demand outlook: Week of 15 April.Global base oils margins outlook: Week of 15 April.Global base oils arb outlook: Week of 15 April.Global base oils cargo flows: Week of 15 April
· US base oils demand could face less impact from latest rise in refinery posted prices as blenders maintain strategy of keeping low inventories.· Muted reaction of US domestic spot prices to refiners’ higher posted prices point to ongoing availability of sufficient supply at competitive prices.· Expectations of sufficient supply add to attraction of continuing to procure on need-to basis.· US Group III base oils demand could get a boost from the product's fast-narrowing premium to Group II base oils.· Overseas demand for US base oils could ease in response to higher US prices and prospect of improving supply in markets like Asia.· Export price-discount to domestic prices and to prices in key markets like Europe stays relatively wide, even if narrower than in Feb and March 2024.· Still-wide export price discount vs other regions points to importance of ongoing arbitrage shipments to overseas markets..· Latin America’s base oils demand shows signs of steadying in markets like Mexico, falling in Argentina, and holding firm in markets like Chile.· Argentina’s sliding lube demand boosts incentive for domestic blenders to maintain low stocks and to procure on a need-to basis.· Trend cuts total base oils consumption.· Trend simultaneously boosts demand for base oils supplies from domestic sources and cuts demand for base oils supplies from overseas sources.· Argentina’s domestic base oils output accounts for almost 70% of country’s total base oils supply in first two months of 2024, up from 45% share in 2023, reflecting that trend..· Trend magnifies impact of weaker demand on base oils imports.· Trend likely had more impact on US suppliers in Q1 2024, when refiners had large surplus volumes to clear.· Trend likely to have less impact on US suppliers in Q2 2024, when refiners have a smaller surplus to clear..· Chile’s base oils imports rise in Q1 2024 year on year for second straight quarter..· Signs of rising base oils consumption follow a rise in Chile’s monthly economic activity index in Feb 2024 for a second month and at its fastest pace since mid-2022..· Europe’s domestic Group I bright stock price premium to VGO edges up but stays well below year-earlier levels.· Europe’s domestic Group I bright stock premium to SN 500 continues to narrow.· Europe’s domestic Group I bright stock price stays at discount to export prices.· Price weakness points to softer regional demand fundamentals for the product.· Europe’s base oils demand for premium-grade base oils could get a boost amid tightening availability of Group I supplies and increasingly competitive prices of Group II/III base oils.· Europe’s Group II heavy-grade premium to Group I SN 500 falls to lowest level in five months, reflecting that trend.· Overseas demand for Europe’s base oils could ease as higher prices and tighter availability incentivize buyers to turn to other sources instead.· Ongoing surge in shipments from Russia to India curbs further the need for buyers in that market to accept higher prices for supplies of European origin.· Signs of more shipments moving from US to Kenya in recent months contrast with dearth of large cargoes from US to the East African country in recent years.· Europe is typically Kenya’s key base oils supplier..· Turkey’s February base oils imports rise to eleven-month high on rebound in shipments of Group I and premium-grade supplies.· Surge in Turkey’s Group I imports from Italy and Greece follow slump in price of the shipments relative to supplies from Russia..· Turkey’s February imports from Italy rise to nine-month high, exceed shipment volumes from Greece and from Russia.· Imports from Italy face prospect of falling following planned closure of Group I plant in the country.· Any such slowdown would likely increase Turkey’s reliance on Greece and Russia to cover most of its Group I import requirements..· South Africa’s February base oils imports rise 66% year on year, with the Netherlands the largest supplier..· South Africa’s surge in import requirements could provide more opportunities for other suppliers if Europe’s shrinking Group I supply boosts its consumption of Group II base oils instead.· Trend would boost attraction for more supplies from the Netherlands to stay in Europe.· Trend would in turn boost South Africa’s requirements from other sources..Asia base oils demand outlook: Week of 15 April.Global base oils margins outlook: Week of 15 April.Global base oils arb outlook: Week of 15 April.Global base oils cargo flows: Week of 15 April
