· Widening US Group II base oils discount to Europe prices facilitates shipment of more arbitrage supplies to that market.· Asia Group II price discount to European prices holds at widest in more than three months, facilitating shipment of more arbitrage supplies to Europe.· Possibility of more US/Asia supplies moving to Europe also raises prospect of the supplies covering demand in markets that Europe also targets with its supplies.· Scenario is sustainable if Europe demand is strong and there is little-to-no surplus supply.· Scenario raises prospect of speeding up build-up of surplus supply in Europe if demand weakens.· Asia Group I discount to Europe prices holds at widest level since October – boosting attraction of moving supplies to markets like India/Mideast Gulf.· Trend cuts competitiveness of any surplus European supplies targeting those markets.· Arbitrage to move Asia supplies to US/Americas gets harder to work – cutting off key outlet that surplus Asia supplies targeted during 2H 2022.· US Group III prices maintain narrower premium to Europe prices, curbing incentive to prioritise US market with Group III supplies.· Asia Group I SN 500/bright stock discount to domestic Chinese prices narrows further, making arbitrage hard to work unless cargo prices fall or domestic Chinese prices rise.· Asia Group I SN 150 prices maintain steep discount to domestic Chinese prices – making arbitrage workable on paper.· Workable arbitrage contrasts with steady monthly flow of Chinese Group I SN 150 cargoes to India.· Asia Group II price discount to domestic Chinese prices narrows further, making arbitrage increasingly unfeasible.· Unattractive arbitrage suggests China’s base oils supply is sufficient to meet demand.· Unattractive arbitrage deters sellers from moving supplies to China, cutting impact of regional plant maintenance work.· Unattractive arbitrage incentivizes sellers to instead target other markets with surplus supplies.· Global Group II prices suggest Mideast Gulf/Europe is more attractive outlet than Americas market for any surplus supplies..Global base oils - week of May 22: Price outlook - margins.Contact us for more information about the data for these stories
· Widening US Group II base oils discount to Europe prices facilitates shipment of more arbitrage supplies to that market.· Asia Group II price discount to European prices holds at widest in more than three months, facilitating shipment of more arbitrage supplies to Europe.· Possibility of more US/Asia supplies moving to Europe also raises prospect of the supplies covering demand in markets that Europe also targets with its supplies.· Scenario is sustainable if Europe demand is strong and there is little-to-no surplus supply.· Scenario raises prospect of speeding up build-up of surplus supply in Europe if demand weakens.· Asia Group I discount to Europe prices holds at widest level since October – boosting attraction of moving supplies to markets like India/Mideast Gulf.· Trend cuts competitiveness of any surplus European supplies targeting those markets.· Arbitrage to move Asia supplies to US/Americas gets harder to work – cutting off key outlet that surplus Asia supplies targeted during 2H 2022.· US Group III prices maintain narrower premium to Europe prices, curbing incentive to prioritise US market with Group III supplies.· Asia Group I SN 500/bright stock discount to domestic Chinese prices narrows further, making arbitrage hard to work unless cargo prices fall or domestic Chinese prices rise.· Asia Group I SN 150 prices maintain steep discount to domestic Chinese prices – making arbitrage workable on paper.· Workable arbitrage contrasts with steady monthly flow of Chinese Group I SN 150 cargoes to India.· Asia Group II price discount to domestic Chinese prices narrows further, making arbitrage increasingly unfeasible.· Unattractive arbitrage suggests China’s base oils supply is sufficient to meet demand.· Unattractive arbitrage deters sellers from moving supplies to China, cutting impact of regional plant maintenance work.· Unattractive arbitrage incentivizes sellers to instead target other markets with surplus supplies.· Global Group II prices suggest Mideast Gulf/Europe is more attractive outlet than Americas market for any surplus supplies..Global base oils - week of May 22: Price outlook - margins.Contact us for more information about the data for these stories