· Diesel price premium to crude rises after sustained drop, stays higher than usual.· High diesel premium incentivizes refiners to produce more middle distillates. Incentive less attractive than previously.· India’s domestic retail diesel premium to crude climbs to highest since April, boosting attraction of increasing middle distillates production.· China’s Shandong diesel premium to crude extends fall to lowest since August..· Diesel premium to crude trends lower as supply tightness eases.· Global refinery run rates hold firm, adding to supply..· Refiners mostly show little sign of boosting base oils output in response to lower diesel values, highlighting ongoing strength of middle distillates prices.· Rebounding Chinese diesel exports free up more Asia-Pacific cargoes to move westwards.· US distillates stocks extend recovery last week to highest since February..· Americas base oils supply stays lower than usual heading in to Q4, limiting size of year-end supply surplus.· Europe’s base oils supply stays low heading into Q4, limiting size of any surplus in the face of weaker demand.· Lower base oils supply in Asia in Q4 curbs downward price pressure or urgency to line up arbitrage shipments to more distant markets.· Signs of lower global supply raises prospect of smaller surplus early next year.· Surplus typically helps to cushion impact of plant maintenance that usually peaks in first half of each year.· Jump in Italy’s base oils output in October coincides with waning regional demand. Rising supplies could help to cover for drop in Group I shipments from Russia.· Unusual rise in base oils exports from Netherlands to markets like US and Singapore in Q4 coincides with weak regional demand in Europe.· Extended fall in Group III shipments from Mideast Gulf to Europe increases region’s reliance on Spain for its Group III supplies..· Group III shipments from other regions would take time to adjust if supply from Spain were to fall.· That adjustment period raises prospect of leaving Europe with tight supplies in the interim.· Fall in Spain’s November premium-grade supply shows signs of extending into December, adding to tighter availability in Europe.· Taiwan’s supplies surge in November. Price impact more muted as China absorbs more supplies.· South Korea’s November base oils exports stay low, raising prospect of more balanced supply-demand fundamentals heading into start of 2023.· Singapore’s base oils exports surge last week to six-month high.· Singapore’s four-week average base oil exports rise last week to four-month high.· Singapore’s four-week average base oils exports to southeast Asia rise to highest in more than eight months.· India’s very-light grade base oils imports from Spain slump in November to fourteen-month low.· Drop in supplies coincides with ongoing slowdown in premium-grade shipments from Spain since mid-November..Global base oils - week of Dec 19: Demand outlook
· Diesel price premium to crude rises after sustained drop, stays higher than usual.· High diesel premium incentivizes refiners to produce more middle distillates. Incentive less attractive than previously.· India’s domestic retail diesel premium to crude climbs to highest since April, boosting attraction of increasing middle distillates production.· China’s Shandong diesel premium to crude extends fall to lowest since August..· Diesel premium to crude trends lower as supply tightness eases.· Global refinery run rates hold firm, adding to supply..· Refiners mostly show little sign of boosting base oils output in response to lower diesel values, highlighting ongoing strength of middle distillates prices.· Rebounding Chinese diesel exports free up more Asia-Pacific cargoes to move westwards.· US distillates stocks extend recovery last week to highest since February..· Americas base oils supply stays lower than usual heading in to Q4, limiting size of year-end supply surplus.· Europe’s base oils supply stays low heading into Q4, limiting size of any surplus in the face of weaker demand.· Lower base oils supply in Asia in Q4 curbs downward price pressure or urgency to line up arbitrage shipments to more distant markets.· Signs of lower global supply raises prospect of smaller surplus early next year.· Surplus typically helps to cushion impact of plant maintenance that usually peaks in first half of each year.· Jump in Italy’s base oils output in October coincides with waning regional demand. Rising supplies could help to cover for drop in Group I shipments from Russia.· Unusual rise in base oils exports from Netherlands to markets like US and Singapore in Q4 coincides with weak regional demand in Europe.· Extended fall in Group III shipments from Mideast Gulf to Europe increases region’s reliance on Spain for its Group III supplies..· Group III shipments from other regions would take time to adjust if supply from Spain were to fall.· That adjustment period raises prospect of leaving Europe with tight supplies in the interim.· Fall in Spain’s November premium-grade supply shows signs of extending into December, adding to tighter availability in Europe.· Taiwan’s supplies surge in November. Price impact more muted as China absorbs more supplies.· South Korea’s November base oils exports stay low, raising prospect of more balanced supply-demand fundamentals heading into start of 2023.· Singapore’s base oils exports surge last week to six-month high.· Singapore’s four-week average base oil exports rise last week to four-month high.· Singapore’s four-week average base oils exports to southeast Asia rise to highest in more than eight months.· India’s very-light grade base oils imports from Spain slump in November to fourteen-month low.· Drop in supplies coincides with ongoing slowdown in premium-grade shipments from Spain since mid-November..Global base oils - week of Dec 19: Demand outlook
