· US base oils demand could get support from seasonal pick-up in consumption and signs of tighter surplus supplies.· Tighter supply and rising feedstock costs raise prospect of steady or higher prices, providing further support to demand.· Several refiners duly announce new increases in posted prices in April 2024.· Latest price increases outpace size of recent rise in feedstock/heating oil prices, suggesting supply-demand fundamentals provide additional support.· Blenders’ strategy of maintaining low inventories magnifies the impact of any rise in demand.· A pick-up in domestic demand would likely curb base oils volumes available for export.· Such a drop in surplus supply would follow a similar pattern to Jan 2024, when a round of stock replenishment boosted domestic demand, which in turn cut supply available for export..· Prospect of seasonal rise in lube demand in Latin America in Q2 2024 vs Q1 2024 likely to support firm requirements for base oils supplies.· Demand for base oils from overseas sources like US could ease in response to firmer US export prices and higher regional base oils production.· Prospect of firmer supply-demand fundamentals and rising feedstock costs could also add to Europe’s base oils demand.· Europe’s relatively weak Group I domestic prices vs feedstock/competing fuel prices instead point to balanced-to-weak regional supply-demand fundamentals.· Europe’s increasingly firm Group I export prices vs domestic prices point to stronger overseas demand.· Incentive to limit production or to focus on overseas markets would keep regional fundamentals more balanced if demand stays weak; it would tighten regional fundamentals if demand exceeds expectations.· Europe’s demand for additional Group II supplies from US could start to ease once base oils production in the Netherlands resumes normal operations after scheduled maintenance work that has now ended.· Europe’s additional demand for supplies had provided a valuable outlet for surplus US base oils in Q1 2024.· Any slowdown in those requirements would leave US refiners needing to redirect shipments to other markets instead. .· Italy’s February lube demand rises for ninth month from year earlier, contrasting with sustained fall in country’s base oils output..· Firm lube demand and shrinking base oils stocks would magnify impact of planned closure of Group I base oils unit in Italy.· Rising demand and falling supply would force domestic blenders to cover more of their requirements more quickly with supplies from other countries.· Trend likely to have more immediate benefit for Group I producers in markets like Spain and Greece in view of their logistical proximity to Italy. .· Germany’s total lube demand, or domestic consumption and exports combined, and total lube supply both rise in Jan 2024 for first time since mid-2021..· Firmer demand and production consumes lubricants and base oils inventories faster, which blenders have been maintaining at lower levels.· Any extension of the trend, even if from a low year-earlier base level, would add to signs that the drop in Europe’s lube consumption is bottoming out.· Such a trend would facilitate blenders’ base oils procurement plans and refiners’ production plans.· Such a trend would also trigger a pick-up in base oils requirements.· Any extension of the trend would be more visible in the second quarter of the year, when lube demand typically gets a seasonal boost..· Italy and Spain’s combined lube demand continues to outpace Germany’s lube demand in Jan 2024.· But Germany’s lube demand shortfall narrows for third month to smallest volume since Aug 2023..· Trend suggests Germany’s drag on Europe’s lube demand may be easing..Asia base oils demand outlook: Week of April 8.Global base oils margins outlook: Week of April 8.Global base oils arb outlook: Week of April 8
· US base oils demand could get support from seasonal pick-up in consumption and signs of tighter surplus supplies.· Tighter supply and rising feedstock costs raise prospect of steady or higher prices, providing further support to demand.· Several refiners duly announce new increases in posted prices in April 2024.· Latest price increases outpace size of recent rise in feedstock/heating oil prices, suggesting supply-demand fundamentals provide additional support.· Blenders’ strategy of maintaining low inventories magnifies the impact of any rise in demand.· A pick-up in domestic demand would likely curb base oils volumes available for export.· Such a drop in surplus supply would follow a similar pattern to Jan 2024, when a round of stock replenishment boosted domestic demand, which in turn cut supply available for export..· Prospect of seasonal rise in lube demand in Latin America in Q2 2024 vs Q1 2024 likely to support firm requirements for base oils supplies.· Demand for base oils from overseas sources like US could ease in response to firmer US export prices and higher regional base oils production.· Prospect of firmer supply-demand fundamentals and rising feedstock costs could also add to Europe’s base oils demand.· Europe’s relatively weak Group I domestic prices vs feedstock/competing fuel prices instead point to balanced-to-weak regional supply-demand fundamentals.· Europe’s increasingly firm Group I export prices vs domestic prices point to stronger overseas demand.· Incentive to limit production or to focus on overseas markets would keep regional fundamentals more balanced if demand stays weak; it would tighten regional fundamentals if demand exceeds expectations.· Europe’s demand for additional Group II supplies from US could start to ease once base oils production in the Netherlands resumes normal operations after scheduled maintenance work that has now ended.· Europe’s additional demand for supplies had provided a valuable outlet for surplus US base oils in Q1 2024.· Any slowdown in those requirements would leave US refiners needing to redirect shipments to other markets instead. .· Italy’s February lube demand rises for ninth month from year earlier, contrasting with sustained fall in country’s base oils output..· Firm lube demand and shrinking base oils stocks would magnify impact of planned closure of Group I base oils unit in Italy.· Rising demand and falling supply would force domestic blenders to cover more of their requirements more quickly with supplies from other countries.· Trend likely to have more immediate benefit for Group I producers in markets like Spain and Greece in view of their logistical proximity to Italy. .· Germany’s total lube demand, or domestic consumption and exports combined, and total lube supply both rise in Jan 2024 for first time since mid-2021..· Firmer demand and production consumes lubricants and base oils inventories faster, which blenders have been maintaining at lower levels.· Any extension of the trend, even if from a low year-earlier base level, would add to signs that the drop in Europe’s lube consumption is bottoming out.· Such a trend would facilitate blenders’ base oils procurement plans and refiners’ production plans.· Such a trend would also trigger a pick-up in base oils requirements.· Any extension of the trend would be more visible in the second quarter of the year, when lube demand typically gets a seasonal boost..· Italy and Spain’s combined lube demand continues to outpace Germany’s lube demand in Jan 2024.· But Germany’s lube demand shortfall narrows for third month to smallest volume since Aug 2023..· Trend suggests Germany’s drag on Europe’s lube demand may be easing..Asia base oils demand outlook: Week of April 8.Global base oils margins outlook: Week of April 8.Global base oils arb outlook: Week of April 8