Global base oils – week of Oct 10: Supply outlook

·        Outright crude/diesel prices surge after Opec+ decision to cut crude supplies.

·        Diesel premium to crude stays much higher than usual.

·        High diesel premium incentivizes high refinery run rates, focus on middle distillates production.

·        India retail diesel premium to crude edges lower as crude surges.

·        China’s Shandong province diesel premium to crude falls, still firm amid seasonal support.

·        Refinery run rates edge higher in US, Japan, China amid high diesel premiums to crude.

·        Base oils producers globally face prospect of balancing inventories as demand slows ahead of year-end.

·        US base oils producers so far avoided weather-related disruptions during Atlantic Hurricane season.

·        US plant maintenance over coming months likely to limit surplus supply, partially counter seasonal slowdown in demand.

·        Surplus US cargoes still likely to need to find overseas outlets over coming months.

·        Trend raises prospect of widening gap between domestic and export prices in US.

·        US’ August base oils exports slump to 11-month low.

·        Drop in US exports mirrors volatile domestic demand in recent months.

·        Lower US exports also coincide with more complicated arbitrage opportunities as prices fall in overseas markets.

·        Europe supply likely to be more plentiful following completion of maintenance work, as producers seek to trim stocks well before year-end.

·        Europe export supplies will need to be at competitive prices as producers in other regions target similar outlets.

·        Asia Group I supply could tighten in Q4 as Group I shutdowns in Thailand follow closure of Japanese base oils plant.

·        Singapore’s weekly base oils exports to India surge to highest in almost two months.

·        Singapore’s weekly base oils exports to China fall to lowest in more than three months.

·        Singapore’s four-week average exports to India rebound, exports to China slide.

·        Singapore’s weekly base oils imports fall to second lowest in more than seven months.

·        Singapore takes delivery of more supplies from China over past week.

·        Singapore’s base oils imports from Japan show signs of slowdown.

·        India’s September base oils imports stay low.

·        India’s September imports from Taiwan, China stay high.

·        Close to 10,000t of Group II heavy grades from Taiwan reach India in September.

·        First base oils shipment to Kenya in almost two months to arrive in 2H Oct.