· Diesel prices stay unusually firm versus crude oil, even if down from recent peak in late Aug.· Firm diesel prices contrast with weak base oils values, incentivizing refiners to focus on middle distillates production.· Americas market faces plant maintenance work in coming weeks affecting Group I supplies.· US market faces possibility of weather-related supply disruptions during peak period of Atlantic hurricane season.· US refiners show signs of limiting supply-build during Q3 2023 amid high export volumes..· US’ June base oils/lube supply already lags demand for fifth time in six months..· Supply shortfall reflects impact of plant maintenance work throughout most of 1H 2023 and as firm exports cushion domestic demand weakness.· Supply shortfall leaves market more balanced ahead of seasonal slowdown in demand during Q3 2023..· US’ July base oils exports rise close to record-high levels..· High volumes counter seasonal slowdown in domestic demand, add to prospect of more balanced supply in Q3 2023..· Brazil’s July base oils supply stays high, maintaining surplus over demand close to nine-month high.· Higher-than-usual surplus for second month triggers supply-build ahead of scheduled plant maintenance in the country..· Europe’s base oils market shows signs of staying tight for Group I supplies, contrasting with readier availability of Group II and Group III base oils.· Europe’s June Group I base oils supply falls to multi-year low on slump in output, dearth of imports from Russia..· Lower supply balances out impact of weak regional demand, curbs surplus volumes for other markets, raises prospect of balanced-to-tight supply in Q3 2023, when demand faces seasonal slowdown..· Group II base oils accounts for record-high share of Europe’s base oils supply in June, while Group I accounts for record-low share..· Trend highlights region’s ongoing transition from Group I to Group II base oils..· Netherlands’ June base oils supply lags demand for second month..· Supply shortfall in June mirrors other key markets in Europe, adding to signs of balanced-to-tighter regional supply heading into Q3 2023, when demand typically slows.· Trend raises prospect of smaller regional supply-build in Q3 2023..· UK’s June base oils supply lags demand by widest margin since Jan 2020..· Surge in UK’s supply shortfall reverses supply-build in April and May, leaves fundamentals more balanced at start of Q3 2023.· Sharp reversal in UK’s supply-demand dynamics highlights speed with which sellers can clear surplus even at a time of weaker demand.· Trend highlights more muted competition for access to Africa market amid slowdown in shipments from Russia..· Europe’s Group III base oils supply shows signs of easing as drop in premium-grade exports from Spain in August coincide with lower volumes from Asia-Pacific..· Lower supply would follow weaker regional Group III prices in recent months in face of slack demand, healthy availability.· Lower supply would help to rebalance Europe's weaker supply-demand fundamentals in recent months..Global base oils - week of Sep 11: Price outlook - arbitrage
· Diesel prices stay unusually firm versus crude oil, even if down from recent peak in late Aug.· Firm diesel prices contrast with weak base oils values, incentivizing refiners to focus on middle distillates production.· Americas market faces plant maintenance work in coming weeks affecting Group I supplies.· US market faces possibility of weather-related supply disruptions during peak period of Atlantic hurricane season.· US refiners show signs of limiting supply-build during Q3 2023 amid high export volumes..· US’ June base oils/lube supply already lags demand for fifth time in six months..· Supply shortfall reflects impact of plant maintenance work throughout most of 1H 2023 and as firm exports cushion domestic demand weakness.· Supply shortfall leaves market more balanced ahead of seasonal slowdown in demand during Q3 2023..· US’ July base oils exports rise close to record-high levels..· High volumes counter seasonal slowdown in domestic demand, add to prospect of more balanced supply in Q3 2023..· Brazil’s July base oils supply stays high, maintaining surplus over demand close to nine-month high.· Higher-than-usual surplus for second month triggers supply-build ahead of scheduled plant maintenance in the country..· Europe’s base oils market shows signs of staying tight for Group I supplies, contrasting with readier availability of Group II and Group III base oils.· Europe’s June Group I base oils supply falls to multi-year low on slump in output, dearth of imports from Russia..· Lower supply balances out impact of weak regional demand, curbs surplus volumes for other markets, raises prospect of balanced-to-tight supply in Q3 2023, when demand faces seasonal slowdown..· Group II base oils accounts for record-high share of Europe’s base oils supply in June, while Group I accounts for record-low share..· Trend highlights region’s ongoing transition from Group I to Group II base oils..· Netherlands’ June base oils supply lags demand for second month..· Supply shortfall in June mirrors other key markets in Europe, adding to signs of balanced-to-tighter regional supply heading into Q3 2023, when demand typically slows.· Trend raises prospect of smaller regional supply-build in Q3 2023..· UK’s June base oils supply lags demand by widest margin since Jan 2020..· Surge in UK’s supply shortfall reverses supply-build in April and May, leaves fundamentals more balanced at start of Q3 2023.· Sharp reversal in UK’s supply-demand dynamics highlights speed with which sellers can clear surplus even at a time of weaker demand.· Trend highlights more muted competition for access to Africa market amid slowdown in shipments from Russia..· Europe’s Group III base oils supply shows signs of easing as drop in premium-grade exports from Spain in August coincide with lower volumes from Asia-Pacific..· Lower supply would follow weaker regional Group III prices in recent months in face of slack demand, healthy availability.· Lower supply would help to rebalance Europe's weaker supply-demand fundamentals in recent months..Global base oils - week of Sep 11: Price outlook - arbitrage