· Asia’s base oils prices hold at levels that keep hard to work the arbitrage to markets like Europe and Americas.· Arbitrage stays hard to work even with prospect of seasonal slowdown in Asia’s lube demand in Q2 2024 from Q1 2024.· US and Europe base oil export prices rise in recent weeks as signs of tightening surplus supply coincide with seasonal rise in demand in those regions in Q2 2024.· Disconnect between timing of peak demand in Asia and in Europe and Americas raises prospect of continuation of recent price adjustments in response to the different demand dynamics in different regions.· Asia’s firm base oils prices complicate arbitrage to Americas and Europe in Q1 2024..· Asia’s firm base oils prices in Q1 2024 coincide with tighter-than-expected supply and firm regional demand that typically peaks in the month of March..· Asia’s lube demand in Q2 2024 likely to fall from Q1 2024.· Asia’s base oils supply surplus typically builds in second quarter of the year partly in response to drop in regional demand.· Rising surplus supply would increase need to line up arbitrage shipments to other regions.· Asia’s base oils prices hold at levels that could complicate such shipments to markets like Europe and Americas..· Latin America’s lube demand likely to hold firm in Q2 2024 from Q1 2024..· US and Europe lube demand also likely to improve in Q2 2024 vs Q1 2024.· Firmer demand would trim surplus base oils supply, curbing need to keep open the arbitrage to overseas markets.· Rising US and Europe base oil export prices reflect that trend, curbing feasibility of arbitrage to markets like Asia..· Change in supply-demand dynamics in different regions over the coming months suggest that price-differentials between the different regions have yet to complete their adjustments in order to maintain relative supply-demand balance.· The longer the adjustments take, the longer before arbitrage opportunities adjust accordingly. · The longer it takes for arbitrage opportunities to adjust, the higher the prospect of a build-up of surplus volumes in some regions and tighter-than-expected availability in others. .Global base oils margins outlook: Week of April 8
· Asia’s base oils prices hold at levels that keep hard to work the arbitrage to markets like Europe and Americas.· Arbitrage stays hard to work even with prospect of seasonal slowdown in Asia’s lube demand in Q2 2024 from Q1 2024.· US and Europe base oil export prices rise in recent weeks as signs of tightening surplus supply coincide with seasonal rise in demand in those regions in Q2 2024.· Disconnect between timing of peak demand in Asia and in Europe and Americas raises prospect of continuation of recent price adjustments in response to the different demand dynamics in different regions.· Asia’s firm base oils prices complicate arbitrage to Americas and Europe in Q1 2024..· Asia’s firm base oils prices in Q1 2024 coincide with tighter-than-expected supply and firm regional demand that typically peaks in the month of March..· Asia’s lube demand in Q2 2024 likely to fall from Q1 2024.· Asia’s base oils supply surplus typically builds in second quarter of the year partly in response to drop in regional demand.· Rising surplus supply would increase need to line up arbitrage shipments to other regions.· Asia’s base oils prices hold at levels that could complicate such shipments to markets like Europe and Americas..· Latin America’s lube demand likely to hold firm in Q2 2024 from Q1 2024..· US and Europe lube demand also likely to improve in Q2 2024 vs Q1 2024.· Firmer demand would trim surplus base oils supply, curbing need to keep open the arbitrage to overseas markets.· Rising US and Europe base oil export prices reflect that trend, curbing feasibility of arbitrage to markets like Asia..· Change in supply-demand dynamics in different regions over the coming months suggest that price-differentials between the different regions have yet to complete their adjustments in order to maintain relative supply-demand balance.· The longer the adjustments take, the longer before arbitrage opportunities adjust accordingly. · The longer it takes for arbitrage opportunities to adjust, the higher the prospect of a build-up of surplus volumes in some regions and tighter-than-expected availability in others. .Global base oils margins outlook: Week of April 8
