Global base oils - week Jun 27: Supply

· Diesel premium to crude stays unusually high in US/Europe.

· Tight middle distillates supply/high premiums incentivize refiners to focus on diesel/jet fuel.

· Strong diesel prices incentivize base oil refiners to hold off producing additional supplies beyond term commitments.

· Strong diesel prices likely to have largest impact/cut surplus supply of very-light grade base oils.

· Retail diesel prices in India continue to lag higher crude, squeezing diesel margins. But diesel margins remain much firmer using discounted crude.

· Chinese diesel prices remain steady/low vs crude.

· Japan’s refinery run rates hold at lower level.

· China’s refinery run rates in Shandong extend rebound.

· Base oil plant maintenance in Europe expected to end in coming weeks, boosting supply.

· Europe supply could improve further in face of easing demand.

· Any drop in demand for term supplies would free up more volumes for spot market.

· Italy’s base oil supply falls to less than half typical levels in first four months of 2022.

· India’s May base oils supply falls to 3-month low, still firm.

· Singapore’s base oil exports show signs of strong rebound in June vs May.

· Singapore’s base oil exports over last four weeks rise to highest average volume in at least 3 months.

· Singapore’s base oil exports to China show signs of rebounding in June vs April-May levels.

· Singapore’s base oil exports last week included rare shipment to Italy – first in more than five years.

· Singapore sees sustained slowdown in imports from Europe in recent weeks.

· Singapore took delivery of another cargo from Saudi Arabia last week.

· Taiwan loads unusually large shipment of Group II base oils on single vessel in recent days.

· India set to take delivery of cargoes from Saudi Arabia, Singapore over coming week.

· Nigeria takes delivery of cargoes from Europe, USGC in June.

· Kenya takes delivery of more than 11,000t in June, after sharp slowdown in May.