Global base oils – week of Sep 12: Supply outlook

· Diesel prices hold firm vs crude but slip from recent highs.

· Strong diesel prices incentivize refiners to maximise middle distillates production.

· Refinery run rates stay high in US, Japan, but fall from recent highs; Shandong China run rates trend lower.

· Shandong China diesel premium to crude edges down, stays close to highest this year.

· India retail diesel premium to crude stays lower than usual, incentivizes refiners to produce more base oils.

· Refinery maintenance work gathers pace in all key regions.

· US supply buffer remains intact amid lack of weather-related disruptions.

· Large export volumes, recent and upcoming maintenance limits US surplus.

· Weaker-than-usual regional demand in Europe raises prospect of rising surplus supply.

· Lack of arbitrage opportunities curbs outlets for Europe Group I supplies to tap overseas demand.

· Group I supplies of Russian origin find outlets in Turkey, Mideast Gulf, curbing requirements from other markets.

· Group I base oils exports from Italy show signs of recovery.

· Arbitrage supplies from Mideast Gulf move to less common markets.

· Upcoming plant maintenance, refinery run cuts trim Asia-Pacific supply.

· Taiwan exports more than 20,000t of Group II base oils in single cargo in past week.

· Taiwan’s August base oils exports rebound, shipments to India surge.

· Large volume of Taiwan Group II heavy grades reached India in late August.

· Singapore 4-week average base oils exports to China rise to highest in more than two months.

· Singapore 4-week average base oils exports to India fall to lowest in three months.

· Large cargo bound for US sets off from Singapore over past week.

· Singapore’s weekly base oils imports fell last week to lowest in more than six months.

· Singapore imported no supplies from Japan last week for first time in more than a month.

· Pause in cargoes from Europe to Singapore extends into fourth month.

· India’s August base oils imports fall sharply from July as seasonal slowdown, falling prices prompt buyers to hold back.

· India’s August base oils imports from US slump even as US’ July base oils exports surged.

· India takes delivery in late August of cargo of Group III base oils from UAE with combination of all grades.

· India takes delivery in late August of large cargo of very light grades of Spanish origin.