· Group I/II producers face more incentive to produce diesel.· Group III producers face less incentive to switch to producing diesel. Challenge is feedstock supply..· Producers focus on covering term commitments, less surplus for other buyers.· Europe faces ongoing challenge of tight Group I and Group II supply.· Dwindling supplies from Russia coincide with Group I plant maintenance in Europe.· US Group II supply shows signs of sustained drop in production, tighter availability.· US Group II exports to Europe already slumped in February.· Buyers most reliant on spot supplies likely to face growing challenge securing supply.· Netherlands’ February base oils consumption absorbs unusually large share of country’s output.· Wave of supplies from Netherlands continues to reach Singapore in April.· Nigeria’s base oil imports in April rise vs March.· Asia supply looks more balanced.· But high freight costs and sporadic spot supply limit arbitrage opportunities to move product to Europe.· Thailand’s base oil plant maintenance work appears to have taken place in February, rather than March.· Large flow of shipments from Japan to Spore in April coincides with jump in Japanese base oils production..· Taiwan’s April base oil exports slump vs March, with light grades lagging heavy grades.· Taiwan’s exports show signs of improving in May.· Singapore April shipments show signs of falling vs high March levels.· Singapore April shipments to China fall vs March levels.· Singapore April shipments to Indonesia, India rise from March levels· Singapore April shipments include large cargo to Malta – first in seven months.· India - arrival of supplies from South Korea, US, Singapore, UAE, Saudi Arabia at end-Apr/ over coming week.
