· Global diesel prices hold firm vs crude, down from recent highs.· Unusually high diesel premium continues to incentivize refiners to maximise distillates production.· Tight diesel supply and prospect of even tighter supply, combined with high prices, provide refiners with ready alternative in face of weak base oils prices.· India’s retail diesel premium to crude stays steady and low, reflecting unchanged retail diesel price since May.· China’s diesel premium to crude holds close to highest in a year..· Prospect of more widespread focus on diesel production at expense of base oils likely to impact base oils supply over coming months and especially early next year.· Refinery run rates hold firm in US, Japan.· US middle distillates stocks edge down last week, holding close to lowest in 18 years.· Germany’s September diesel stocks fall close to lowest in seven years..· Many refiners’ firm Q3 base oils profits highlight base oil’s wide premium to crude, even if premium to diesel narrower than usual.· Base oil’s firm premium to crude for products like Group III supports strong incentive to maintain/raise production.· Refiners face prospect of increasingly synchronised slowdown in lube demand in Americas, Europe, Asia-Pacific.· US’ September base oils exports to Europe slump for second month amid signs of lower production.· Lower US exports to Europe in Aug-Sep likely outpace slowdown in demand.· Trend would need to continue over coming months to avoid supply-build in Europe.· US refiner likely restarting base oils unit after scheduled maintenance in October.· Brazil’s base oils supply stays more balanced amid lower production, imports.· Any pick-up in Chinese demand would consume more Asia-Pacific supplies, curb arbitrage flows to Americas.· Any pick-up in Chinese demand so far insufficient to trigger a price adjustment that shuts the arbitrage to the Americas.· Asia-Pacific surplus shrinks after clear-out of cargoes in Q3, plant run cuts, plant maintenance work, plant closure.· Asia Group I structural supply set to tighten further when another plant closes next year.· Thailand’s October exports show signs of falling sharply vs September.· India’s October base oils imports rise from September, remain lower than usual.· Taiwan’s October base oils exports fall from September, hold firm.· Singapore’s four-week average domestic base oil exports extend fall to lowest in more than seven months..· Singapore’s four-week average base oils exports to China fall close to lowest since July.· Singapore’s four-week average base oils exports to India fall close to lowest since June.· Singapore’s four-week average base oils exports to southeast Asia stay higher than usual, especially to Indonesia.· Singapore’s total base oils imports over last four weeks remain unusually low.· Singapore’s base oils imports from China slow markedly in recent weeks.· Singapore’s base oils imports from Japan show signs of reviving..Global base oils – week of Nov 14: Demand outlook
· Global diesel prices hold firm vs crude, down from recent highs.· Unusually high diesel premium continues to incentivize refiners to maximise distillates production.· Tight diesel supply and prospect of even tighter supply, combined with high prices, provide refiners with ready alternative in face of weak base oils prices.· India’s retail diesel premium to crude stays steady and low, reflecting unchanged retail diesel price since May.· China’s diesel premium to crude holds close to highest in a year..· Prospect of more widespread focus on diesel production at expense of base oils likely to impact base oils supply over coming months and especially early next year.· Refinery run rates hold firm in US, Japan.· US middle distillates stocks edge down last week, holding close to lowest in 18 years.· Germany’s September diesel stocks fall close to lowest in seven years..· Many refiners’ firm Q3 base oils profits highlight base oil’s wide premium to crude, even if premium to diesel narrower than usual.· Base oil’s firm premium to crude for products like Group III supports strong incentive to maintain/raise production.· Refiners face prospect of increasingly synchronised slowdown in lube demand in Americas, Europe, Asia-Pacific.· US’ September base oils exports to Europe slump for second month amid signs of lower production.· Lower US exports to Europe in Aug-Sep likely outpace slowdown in demand.· Trend would need to continue over coming months to avoid supply-build in Europe.· US refiner likely restarting base oils unit after scheduled maintenance in October.· Brazil’s base oils supply stays more balanced amid lower production, imports.· Any pick-up in Chinese demand would consume more Asia-Pacific supplies, curb arbitrage flows to Americas.· Any pick-up in Chinese demand so far insufficient to trigger a price adjustment that shuts the arbitrage to the Americas.· Asia-Pacific surplus shrinks after clear-out of cargoes in Q3, plant run cuts, plant maintenance work, plant closure.· Asia Group I structural supply set to tighten further when another plant closes next year.· Thailand’s October exports show signs of falling sharply vs September.· India’s October base oils imports rise from September, remain lower than usual.· Taiwan’s October base oils exports fall from September, hold firm.· Singapore’s four-week average domestic base oil exports extend fall to lowest in more than seven months..· Singapore’s four-week average base oils exports to China fall close to lowest since July.· Singapore’s four-week average base oils exports to India fall close to lowest since June.· Singapore’s four-week average base oils exports to southeast Asia stay higher than usual, especially to Indonesia.· Singapore’s total base oils imports over last four weeks remain unusually low.· Singapore’s base oils imports from China slow markedly in recent weeks.· Singapore’s base oils imports from Japan show signs of reviving..Global base oils – week of Nov 14: Demand outlook
