· Diesel prices hold firm vs crude oil, even if down from recent highs in Aug 2023.· US Group I supply likely to remain limited amid ongoing plant maintenance work.· US Group II supply likely to be more readily available as firm heavy-grade margins curb pressure on refiners to trim run-rates.· Trend would increase importance of keeping open the arbitrage to move surplus light grades to markets like Mexico.· US Group III supply from Asia shows signs of holding firm in Oct 2023 vs Sep 2023, improving from Mideast Gulf in Oct 2023 vs Sep 2023..· US’ base oils exports to Brazil fall to four-month low in August..· Slowdown follows surge in Brazil’s surplus supplies in Q3 2023 ahead of plant maintenance work in 2H 2023.· Brazil’s stock-build, followed by the completion of the maintenance work in the fourth quarter, raises the prospect of reversion of country’s imports from US to more typical, lower levels.· Any slowdown in Brazil’s requirements would coincide with seasonal rise in US’ surplus supply at year-end..· Europe’s Group I base oils supply tightness could ease as demand slows and regional production rises.· Europe’s Group II base oils supply could face slowdown in November amid signs of slowdown in shipments from US.· Europe’s Group III base oils supply shows signs of rising in Oct 2023 vs previous month from Mideast Gulf, falling from Spain.· Europe’s base oils exports to markets outside Europe recover to five-month high in August..· Pick-up in shipments cushions impact of seasonal slowdown in European demand amid rise in regional supply.· Higher shipments mostly reflect term cargoes, curbing impact of pick-up in arbitrage shipments from markets like Turkey.· Shipments face prospect of extending rise amid steady recovery in exports from Italy..· Europe’s August Group III base oils supply holds steady as rise in shipments from Mideast Gulf balance out slowdown in supplies from Spain, Asia..· Dynamic shows signs of changing for September, with higher volumes from Spain and Asia outweighing drop in supplies from Mideast Gulf.· Weakness of Europe Group III prices even with lower supply volumes in recent months points to drop in structural demand..· South Korea’s September base oils exports to UAE stay unusually high..· Sustained wave of shipments to UAE provides valuable outlet for South Korea’s supplies, cushioning impact of weaker Chinese demand.· Wave of shipments boosts premium-grade supplies in Mideast Gulf, curbs arbitrage opportunities for any surplus cargoes from Europe or US..· Europe’s total base oils imports fall in first eight months of 2023 even as shipments rise from US, Mideast Gulf and Asia combined..· Contrasting flows mostly reflects slump in imports from Russia.· Contrasting flows reflects Europe’s rising supply/consumption of premium-grade base oils.· Contrasting flows reflects Europe’s falling supply/consumption of Group I base oils amid lower domestic output and imports..· Saudi Arabia’s base oils exports to African markets rises in September, boosting supply options for buyers in those markets.· Cargo from Saudi Arabia set to reach Nigeria this week – such flows are rare, could reflect further expansion of Saudi Arabia shipments to more markets in Africa.· Volume of Saudi Arabia's exports to Africa remains low relative to shipments to India and UAE, sustaining importance of those markets as key outlets..Global base oils - week of Oct 23: Demand outlook
· Diesel prices hold firm vs crude oil, even if down from recent highs in Aug 2023.· US Group I supply likely to remain limited amid ongoing plant maintenance work.· US Group II supply likely to be more readily available as firm heavy-grade margins curb pressure on refiners to trim run-rates.· Trend would increase importance of keeping open the arbitrage to move surplus light grades to markets like Mexico.· US Group III supply from Asia shows signs of holding firm in Oct 2023 vs Sep 2023, improving from Mideast Gulf in Oct 2023 vs Sep 2023..· US’ base oils exports to Brazil fall to four-month low in August..· Slowdown follows surge in Brazil’s surplus supplies in Q3 2023 ahead of plant maintenance work in 2H 2023.· Brazil’s stock-build, followed by the completion of the maintenance work in the fourth quarter, raises the prospect of reversion of country’s imports from US to more typical, lower levels.· Any slowdown in Brazil’s requirements would coincide with seasonal rise in US’ surplus supply at year-end..· Europe’s Group I base oils supply tightness could ease as demand slows and regional production rises.· Europe’s Group II base oils supply could face slowdown in November amid signs of slowdown in shipments from US.· Europe’s Group III base oils supply shows signs of rising in Oct 2023 vs previous month from Mideast Gulf, falling from Spain.· Europe’s base oils exports to markets outside Europe recover to five-month high in August..· Pick-up in shipments cushions impact of seasonal slowdown in European demand amid rise in regional supply.· Higher shipments mostly reflect term cargoes, curbing impact of pick-up in arbitrage shipments from markets like Turkey.· Shipments face prospect of extending rise amid steady recovery in exports from Italy..· Europe’s August Group III base oils supply holds steady as rise in shipments from Mideast Gulf balance out slowdown in supplies from Spain, Asia..· Dynamic shows signs of changing for September, with higher volumes from Spain and Asia outweighing drop in supplies from Mideast Gulf.· Weakness of Europe Group III prices even with lower supply volumes in recent months points to drop in structural demand..· South Korea’s September base oils exports to UAE stay unusually high..· Sustained wave of shipments to UAE provides valuable outlet for South Korea’s supplies, cushioning impact of weaker Chinese demand.· Wave of shipments boosts premium-grade supplies in Mideast Gulf, curbs arbitrage opportunities for any surplus cargoes from Europe or US..· Europe’s total base oils imports fall in first eight months of 2023 even as shipments rise from US, Mideast Gulf and Asia combined..· Contrasting flows mostly reflects slump in imports from Russia.· Contrasting flows reflects Europe’s rising supply/consumption of premium-grade base oils.· Contrasting flows reflects Europe’s falling supply/consumption of Group I base oils amid lower domestic output and imports..· Saudi Arabia’s base oils exports to African markets rises in September, boosting supply options for buyers in those markets.· Cargo from Saudi Arabia set to reach Nigeria this week – such flows are rare, could reflect further expansion of Saudi Arabia shipments to more markets in Africa.· Volume of Saudi Arabia's exports to Africa remains low relative to shipments to India and UAE, sustaining importance of those markets as key outlets..Global base oils - week of Oct 23: Demand outlook