· US base oils demand set to stay muted over coming weeks amid year-end slowdown.· Demand likely to revive at start of new year as buyers move to replenish depleted stocks.· Any signs of steadier base oils prices and more manageable supply-build could provide additional support.· Any pick-up in demand could stay limited as plentiful availability gives buyers flexibility to procure smaller volumes more frequently.· Premium of US Group II posted prices to spot prices widens close to multi-year high..· Widening premium could add to preference for buyers to procure smaller volumes when they start to replenish stocks.· Sustained fall in US export prices in recent months boosts arbitrage opportunities to markets like Africa.· Several more cargoes load from US in recent weeks before heading to Nigeria.· Cargoes add to increasingly regular shipments from US to Nigeria in recent months..· Latin America’s base oils demand could hold relatively steady if signs of more balanced fundamentals in key markets like Brazil extend through year-end and early next year.· Any sharp pick-up in region’s imports in Q4 2024 would by contrast increase prospect of large supply-build at a time when demand faces seasonal slowdown. · Latin America’s lube demand already likely extended its year-on-year fall in Oct 2024 as slide in Argentina’s lube consumption gathers pace..· Protracted and steep slide in lube consumption adds to blenders’ incentive to trim inventories; demand weakness also complicates such moves.· Sliding demand incentivizes blenders and distributors to maintain low base oils stocks, and to procure smaller volumes more frequently from domestic sources.· Dynamic raises prospect of curbing for longer any significant pick-up in demand for base oils supplies from overseas markets.· Argentina’s base oils imports stay low in Oct 2024, with almost all the supplies originating from the US..· Trend highlights country’s weak demand.· Country’s weak demand magnifies need for US especially to maximise its share of Argentina’s imports to help manage its own year-end supply-build.· Higher share of imports from US in Oct 2024 highlights more competitive prices for US supplies compared with earlier in the year..· US base oils demand from overseas buyers could get further boost from any extension of slide in exports from Europe to non-EU markets into Q4 2024.· Any such trend would follow slump in Europe’s exports to non-EU markets to three-year low in Sept 2024..· Europe’s base oils demand could get a boost early next year, when lube demand typically rises strongly from month of December.· Signs of ongoing slide in Europe’s lube demand in Q4 2024 could deepen dip in base oils requirements at year-end.· Italy’s lube demand falls in Oct 2024 for fifth time in six months, adding to such signs..· Ongoing slide in Europe’s lube demand in Q4 2024 raises prospect of slowdown extending at least into Q1 2025.· Shrinking demand could cut size of seasonal pick-up in lube consumption at start of 2025.· Such a scenario, and signs of healthy availability of base oils supply, could incentivize blenders to hold off moves to replenish stocks for as long as possible.· Any subsequent moves to replenish stocks could then consist of smaller volumes to cover immediate requirements..· Europe’s Group I base oils demand faces seasonal slowdown.· Europe had been increasingly frequent destination for larger shipments from Turkey in H2 2024.· November-loading cargo from Turkey moves instead to Nigeria.· Shipment to Nigeria points to insufficient buying interest in Europe for the supplies.· Overseas demand for Europe’s Group I base oils could get boost following fall in export prices at end-Nov 2024.· Arbitrage to markets like Middle East and India stays hard to work even with drop in prices..· Arbitrage to markets like Nigeria already faces growing competition from raft of suppliers in other regions..Asia base oils demand outlook: Week of 2 Dec.Global base oils margins outlook: Week of 2 Dec .Global base oils arb outlook: Week of 2 Dec.Global base oils cargo flows: Week of 2 Dec
· US base oils demand set to stay muted over coming weeks amid year-end slowdown.· Demand likely to revive at start of new year as buyers move to replenish depleted stocks.· Any signs of steadier base oils prices and more manageable supply-build could provide additional support.· Any pick-up in demand could stay limited as plentiful availability gives buyers flexibility to procure smaller volumes more frequently.· Premium of US Group II posted prices to spot prices widens close to multi-year high..· Widening premium could add to preference for buyers to procure smaller volumes when they start to replenish stocks.· Sustained fall in US export prices in recent months boosts arbitrage opportunities to markets like Africa.· Several more cargoes load from US in recent weeks before heading to Nigeria.· Cargoes add to increasingly regular shipments from US to Nigeria in recent months..· Latin America’s base oils demand could hold relatively steady if signs of more balanced fundamentals in key markets like Brazil extend through year-end and early next year.· Any sharp pick-up in region’s imports in Q4 2024 would by contrast increase prospect of large supply-build at a time when demand faces seasonal slowdown. · Latin America’s lube demand already likely extended its year-on-year fall in Oct 2024 as slide in Argentina’s lube consumption gathers pace..· Protracted and steep slide in lube consumption adds to blenders’ incentive to trim inventories; demand weakness also complicates such moves.· Sliding demand incentivizes blenders and distributors to maintain low base oils stocks, and to procure smaller volumes more frequently from domestic sources.· Dynamic raises prospect of curbing for longer any significant pick-up in demand for base oils supplies from overseas markets.· Argentina’s base oils imports stay low in Oct 2024, with almost all the supplies originating from the US..· Trend highlights country’s weak demand.· Country’s weak demand magnifies need for US especially to maximise its share of Argentina’s imports to help manage its own year-end supply-build.· Higher share of imports from US in Oct 2024 highlights more competitive prices for US supplies compared with earlier in the year..· US base oils demand from overseas buyers could get further boost from any extension of slide in exports from Europe to non-EU markets into Q4 2024.· Any such trend would follow slump in Europe’s exports to non-EU markets to three-year low in Sept 2024..· Europe’s base oils demand could get a boost early next year, when lube demand typically rises strongly from month of December.· Signs of ongoing slide in Europe’s lube demand in Q4 2024 could deepen dip in base oils requirements at year-end.· Italy’s lube demand falls in Oct 2024 for fifth time in six months, adding to such signs..· Ongoing slide in Europe’s lube demand in Q4 2024 raises prospect of slowdown extending at least into Q1 2025.· Shrinking demand could cut size of seasonal pick-up in lube consumption at start of 2025.· Such a scenario, and signs of healthy availability of base oils supply, could incentivize blenders to hold off moves to replenish stocks for as long as possible.· Any subsequent moves to replenish stocks could then consist of smaller volumes to cover immediate requirements..· Europe’s Group I base oils demand faces seasonal slowdown.· Europe had been increasingly frequent destination for larger shipments from Turkey in H2 2024.· November-loading cargo from Turkey moves instead to Nigeria.· Shipment to Nigeria points to insufficient buying interest in Europe for the supplies.· Overseas demand for Europe’s Group I base oils could get boost following fall in export prices at end-Nov 2024.· Arbitrage to markets like Middle East and India stays hard to work even with drop in prices..· Arbitrage to markets like Nigeria already faces growing competition from raft of suppliers in other regions..Asia base oils demand outlook: Week of 2 Dec.Global base oils margins outlook: Week of 2 Dec .Global base oils arb outlook: Week of 2 Dec.Global base oils cargo flows: Week of 2 Dec
