· Europe’s Group II base oils prices maintain steep premium to US/Asia prices.· Trend incentivizes more shipments to move to Europe and to markets that Europe typically supplies.· Europe’s Group I premium to Asia stays wide even as it narrows.· Narrower Europe Group I premium to Asia could deter buyers from seeking supplies from Asia until they are comfortable that premium is unlikely to narrow any further.· Europe Group III prices remain at levels likely to incentivize overseas refiners to target the region even as the prices weaken vs US and Asia prices.· Any continuation of that trend could incentivize refiners to move more Group III supplies to US instead.· Arbitrage to move Asia Group II supplies to US remains hard to work, especially for light grades.· Arbitrage to move Asia Group I bright stock to US remains more feasible, as steady flows moved from the region to Latin America.· Arbitrage to move Asia Group II base oils to China stays shut, complicating shipments for term buyers in China.· Arbitrage to move Asia Group I bright stock to China stays hard to work.· Trends likely to prolong flow of larger-than-usual volumes of Group II base oils to southeast Asia and Group I bright stock to markets like India.· Arbitrage to move Asia Group I SN 150 to China stays wide open, contrasting with steady flow of exports of the grade from China..Global base oils – week of July 3: Price outlook - margins
