· US Group II base oils export prices fall in recent weeks as supply-demand tightness eases.· US Group II prices maintain wide premium to CFR India prices even with steep fall in US prices in recent weeks..· Ongoing US base oils premium to CFR India prices suggests US supply-demand fundamentals remain at levels that curb urgency to open arbitrage to move surplus supplies to that market for now.· Persistence of US base oils premium to CFR India prices suggests that any subsequent pick-up in arbitrage shipments from US are unlikely to reach outlets like India or Middle East at least for several more months.· A lack of or delay in availability of any such shipments would also postpone any downward price pressure that the extra supplies generated in those destination markets.· A lack of or delay in availability of any such shipments would also force buyers that required additional volumes in those markets to seek other sources instead..· US Group II light-grade prices hold firm relative to heavy-grade prices and to Group III prices even after recent price-drop..· US Group II price-strength points to relatively firm supply-demand fundamentals, especially compared with those other products..· US base oils and lube exports hold firm in July-Aug 2024 even with high US base oils export prices..· Recent exports include regular shipments to markets like West Africa, India and Pakistan.· Firm exports limit size of supply-build in US during Q3 2024 and size of surplus to clear at start of Q4 2024..· Planned and unexpected plant maintenance in US at start of Q4 2024 slows further any supply-build.· Prospect of lower-than-expected supply-build in US coincides with tightening supply-surplus in Asia in Aug 2024..· Surplus in Asia likely tightened even more in Sept 2024 as seasonal revival in demand coincided with regional plant maintenance work..· Asia’s tighter fundamentals, and plant maintenance extending into start of Q4 2024, boost incentive for regional buyers to line up supplies from alternative sources.· One such alternative source is US.· Moves to cut US stocks at start of Q4 2024, following peak hurricane period, raise expectations of growing volume of surplus supplies to clear from that market.· A smaller supply surplus in US would instead leave any such volumes lagging expectations.· Any volumes that lag expectations would leave buyers in markets like Asia needing to target other sources or face tighter-than-expected supply at least until end-Q4 2024.
· US Group II base oils export prices fall in recent weeks as supply-demand tightness eases.· US Group II prices maintain wide premium to CFR India prices even with steep fall in US prices in recent weeks..· Ongoing US base oils premium to CFR India prices suggests US supply-demand fundamentals remain at levels that curb urgency to open arbitrage to move surplus supplies to that market for now.· Persistence of US base oils premium to CFR India prices suggests that any subsequent pick-up in arbitrage shipments from US are unlikely to reach outlets like India or Middle East at least for several more months.· A lack of or delay in availability of any such shipments would also postpone any downward price pressure that the extra supplies generated in those destination markets.· A lack of or delay in availability of any such shipments would also force buyers that required additional volumes in those markets to seek other sources instead..· US Group II light-grade prices hold firm relative to heavy-grade prices and to Group III prices even after recent price-drop..· US Group II price-strength points to relatively firm supply-demand fundamentals, especially compared with those other products..· US base oils and lube exports hold firm in July-Aug 2024 even with high US base oils export prices..· Recent exports include regular shipments to markets like West Africa, India and Pakistan.· Firm exports limit size of supply-build in US during Q3 2024 and size of surplus to clear at start of Q4 2024..· Planned and unexpected plant maintenance in US at start of Q4 2024 slows further any supply-build.· Prospect of lower-than-expected supply-build in US coincides with tightening supply-surplus in Asia in Aug 2024..· Surplus in Asia likely tightened even more in Sept 2024 as seasonal revival in demand coincided with regional plant maintenance work..· Asia’s tighter fundamentals, and plant maintenance extending into start of Q4 2024, boost incentive for regional buyers to line up supplies from alternative sources.· One such alternative source is US.· Moves to cut US stocks at start of Q4 2024, following peak hurricane period, raise expectations of growing volume of surplus supplies to clear from that market.· A smaller supply surplus in US would instead leave any such volumes lagging expectations.· Any volumes that lag expectations would leave buyers in markets like Asia needing to target other sources or face tighter-than-expected supply at least until end-Q4 2024.
