Americas base oils - week of April 24: Supply outlook

·        Diesel price premium to crude oil steadies at lowest level in more than a year.

·        Lower diesel premium to crude cuts attraction of maintaining high run-rates, incentivizes refiners to cut production or increase output of other products, including base oils.

·        US base oils supply likely to get boost following recent completion of major plant maintenance.

·        US refiners face challenge of avoiding supply-build amid signs of blenders’ changing procurement trends.

·        Slowdown in US exports to Latin America in February coincides with slowdown in arbitrage supplies from Asia-Pacific to the region.

·        Slowdown in overseas supplies to the region contrasts with signs of steady demand.

·        Slowdown in arbitrage supplies from Asia-Pacific should provide room for pick-up in US shipments to region.

·        US base oils exports to Nigeria show signs of gathering pace, following shipments in February, March and April.

·        Rise in shipments mirrors similar trend in 2022, provides US producers with valuable outlet for surplus supplies.

·        Mideast Gulf takes delivery of record volumes from South Korea in Q1 2023.

·        Shipments complicate arbitrage to Mideast Gulf from other sources like US.

·        Shipments highlight competitive price of Asia-Pacific Group II heavy grades compared with other regions.

·        Price advantage for Asia-Pacific Group II heavy grades extends into Q2 2023.