· US base oils prices hold steady versus feedstock/competing fuel prices.· Base oils margins hold in narrow range even as wave of plant maintenance work in North America coincides with seasonal rise in demand.· Any tightening of supply fundamentals would typically first impact spot shipments for export markets.· Any such move would typically support firmer US export prices relative to domestic prices.· Dynamic could be different this year after US export price-discount to domestic prices stays narrower than usual..· Narrower discount points to more manageable surplus supply at end-2024 and early this year.· Narrower export price-discount, relatively low base oils margins and firmer fundamentals would typically provide refiners with more leverage over prices.· Any extension of steady prices could instead reflect refiners’ concern about demand outlook and subsequent impact on supply..· US Group III base oils supply likely to get boost in March 2025 following arrival of large shipments from Asia and Middle East.· South Korea’s base oils exports to US rise to three-month high in Feb 2025, adding to the March-supplies..· Rise in supplies increases importance of seasonal pick-up in demand to absorb the additional volumes..· Europe’s Group I base oils supply could tighten as blenders’ moves to maintain low stocks in recent months magnify impact of current seasonal rise in demand.· Wave of Group I base oils exports to markets outside Europe in early-2025 already curb size of any supply-build early this year..· Any Group I plant maintenance work in coming months would tighten supply further.· Persistent and wide premium of Europe Group I prices to CFR prices in markets like Middle East and India add to signs of scant availability of surplus volumes..· Europe’s Group II base oils supply could get boost from more feasible arbitrage from US..· US base oils exports to Europe rise at start of 2025 even before US Group II price discount to Europe prices widens further in March 2025.· Rise in US shipments follows sharp slowdown in Europe’s Group II base oils imports at end-2024 and beginning of 2025..· Lower imports partially cushion impact of higher regional base oils output early this year vs Q1 2024..· Europe’s Group III base oils supply with full set of OEM approvals could stay tighter amid signs of still lower-than-usual shipments from Spain in Q1 2025.· Lower volumes of supplies in recent months coincide with increasingly high gap between high end and low end of Europe Group III base oils prices..· Europe’s premium-grade supply from Spain and Indonesia recovers to four-month high in Jan 2025 but still falls from year-earlier levels for fifth month..· Supplies from Spain show signs of reviving in March 2025 after falling in Feb 2025.· Any further pick-up in shipments could change supply-demand fundamentals between supplies with and without full set of OEM approvals.· Pick-up in shipments from Spain set to coincide with arrival of swathe of supplies from Bahrain and UAE in March 2025..Americas/EMEA base oils demand outlook: Week of 24 March.Global base oils margins outlook: Week of 24 March.Global base oils cargo flows: Week of 24 March.Global base oils arb outlook: Week of 24 March.S Korea Feb base oils exports to US rise .Asia base oils supply outlook: Week of 24 March
