· US base oils prices extend rise vs feedstock/competing fuel prices.· Rising base oils margins point to supply-demand fundamentals that are firm enough to support the higher price differentials.· Supply fundamentals likely to be tighter in early Q2 2025 amid heavy round of plant maintenance work in North America.· Plant maintenance work follows slump in US base oils output to four-year low in Feb 2025..· Size of drop in output points to run-cuts, plant maintenance work and/or production issues at multiple plants.· Output in some US districts stays lower than usual for extended period, pointing to ongoing production issues.· Trend suggests output in those districts could continue to stay lower until those issues are resolved.· Slump in output in Feb 2025 complicates any plans to build stocks ahead of round of scheduled maintenance work from March 2025.· Slump in output in Feb 2025 and plant maintenance work from March 2025 likely cuts volume of surplus supplies, curbing refiners’ need to clear lingering volumes through overseas markets.· That dynamic could change as plant maintenance draws to a close over coming weeks..· US Group II light-grade price differential to prices in markets like India strengthens further..· Rising US Group II premium to CFR India price points to more limited surplus supply for now, especially of light grades..· Slump in US base oils imports in Feb 2025 compounds drop in US base oils supply.· US imports shows signs of improving in March-April 2025 amid pick-up in flows from Middle East and South Korea.· Higher imports and lower domestic output raises prospect of rise in availability of Group III base oils, tighter availability of Group II base oils.· US imports show signs of slowing in May 2025.· US/Europe imports of premium-grade base oils from Middle East could get boost if pick-up in shipments from Middle East to Asia in Q1 2025 proves to be temporary, with more supplies instead moving to US/Europe..· Rise in supplies bound for Asia in Q1 2025 also highlights rebound in shipments from Qatar.· Rebound in imports follows unusual slump in shipments from Qatar at end-2024, points to resumption of more regular flows from the supplier..· US/Europe/Asia premium-grade imports from UAE slide in Feb 2025 for second time in three months..· Drop in shipments precedes expected plant maintenance in UAE in Q2 2025.· Drop in shipments could point to moves to build stocks ahead of maintenance work.· Even so, several shipments from UAE reach US in March 2025 and April 2025..· Europe’s base oils supply could tighten because of recent and upcoming plant maintenance work in the region and in markets that supply Europe.· Any temporary shutdown of base oils units in Spain because of last week’s power-outage would tighten supply further.· Even if shutdowns are brief, refineries can face additional unexpected issues as units are brought back online.· Europe’s Group I base oils supply likely to stay limited during Q2 2025 amid steady demand, plant maintenance work and smaller surplus carried over from Q1 2025.· Europe’s Group I base oils supply falls to one-year low in Feb 2025 amid combination of lower output and imports and plant maintenance work..· Lower supply cushions impact of seasonal slowdown in demand, curbs term and spot volumes available for export.· Lower volumes for export squeeze supply for buyers in markets like Nigeria and Singapore.· Europe’s Group I supply, less exports, holds in narrow range in Feb 2025 for third month..· Steady supply suggests the volume is reflective of Europe’s typical monthly Group I requirements.· Regional requirements typically rise above that level around beginning of spring-time.· Dynamic suggests any pick-up in exports to other markets partly depends on size of surplus volume above those regional requirements..· Europe’s Group II base oils supply faces less disruption from ongoing plant maintenance in overseas markets like US.· Group II supply would face more disruption from plant maintenance work in Europe.· Europe’s Group II supply slumped in H1 2024 because of plant-maintenance work in the region..· Maintenance work coincided with seasonal rise in demand in H1 2024.· Impact of any plant maintenance work over coming months would depend on its timing and length, and whether it involved partial or full shutdown..· Europe’s Group III base oils supply could be more mixed.· Arrival in Europe of Group III cargoes from Middle East shows signs of reviving in H2 May 2025 after slowing in April 2025.· Slowdown in shipments coincides with plant maintenance work in Middle East.· Slowdown in shipments would contrast with pick-up in shipments of premium-grade base oils from Spain in April 2025, including steady flows to northwest Europe..· Europe’s Group III 4cSt (low) price discount to 4cSt (high) price narrows in H2 April 2025 after widening steadily over past two years..· Narrower discount could reflect balanced-to-tighter availability of supplies without full set of OEM approvals..US’ February base oils supply slumps.UK’s February base oils output falls.Asia’s Group III imports from Middle East rise in March.Americas/EMEA base oils demand outlook: Week of 5 May.Asia base oils supply outlook: Week of 5 May
· US base oils prices extend rise vs feedstock/competing fuel prices.· Rising base oils margins point to supply-demand fundamentals that are firm enough to support the higher price differentials.· Supply fundamentals likely to be tighter in early Q2 2025 amid heavy round of plant maintenance work in North America.· Plant maintenance work follows slump in US base oils output to four-year low in Feb 2025..· Size of drop in output points to run-cuts, plant maintenance work and/or production issues at multiple plants.· Output in some US districts stays lower than usual for extended period, pointing to ongoing production issues.· Trend suggests output in those districts could continue to stay lower until those issues are resolved.· Slump in output in Feb 2025 complicates any plans to build stocks ahead of round of scheduled maintenance work from March 2025.· Slump in output in Feb 2025 and plant maintenance work from March 2025 likely cuts volume of surplus supplies, curbing refiners’ need to clear lingering volumes through overseas markets.· That dynamic could change as plant maintenance draws to a close over coming weeks..· US Group II light-grade price differential to prices in markets like India strengthens further..· Rising US Group II premium to CFR India price points to more limited surplus supply for now, especially of light grades..· Slump in US base oils imports in Feb 2025 compounds drop in US base oils supply.· US imports shows signs of improving in March-April 2025 amid pick-up in flows from Middle East and South Korea.· Higher imports and lower domestic output raises prospect of rise in availability of Group III base oils, tighter availability of Group II base oils.· US imports show signs of slowing in May 2025.· US/Europe imports of premium-grade base oils from Middle East could get boost if pick-up in shipments from Middle East to Asia in Q1 2025 proves to be temporary, with more supplies instead moving to US/Europe..· Rise in supplies bound for Asia in Q1 2025 also highlights rebound in shipments from Qatar.· Rebound in imports follows unusual slump in shipments from Qatar at end-2024, points to resumption of more regular flows from the supplier..· US/Europe/Asia premium-grade imports from UAE slide in Feb 2025 for second time in three months..· Drop in shipments precedes expected plant maintenance in UAE in Q2 2025.· Drop in shipments could point to moves to build stocks ahead of maintenance work.· Even so, several shipments from UAE reach US in March 2025 and April 2025..· Europe’s base oils supply could tighten because of recent and upcoming plant maintenance work in the region and in markets that supply Europe.· Any temporary shutdown of base oils units in Spain because of last week’s power-outage would tighten supply further.· Even if shutdowns are brief, refineries can face additional unexpected issues as units are brought back online.· Europe’s Group I base oils supply likely to stay limited during Q2 2025 amid steady demand, plant maintenance work and smaller surplus carried over from Q1 2025.· Europe’s Group I base oils supply falls to one-year low in Feb 2025 amid combination of lower output and imports and plant maintenance work..· Lower supply cushions impact of seasonal slowdown in demand, curbs term and spot volumes available for export.· Lower volumes for export squeeze supply for buyers in markets like Nigeria and Singapore.· Europe’s Group I supply, less exports, holds in narrow range in Feb 2025 for third month..· Steady supply suggests the volume is reflective of Europe’s typical monthly Group I requirements.· Regional requirements typically rise above that level around beginning of spring-time.· Dynamic suggests any pick-up in exports to other markets partly depends on size of surplus volume above those regional requirements..· Europe’s Group II base oils supply faces less disruption from ongoing plant maintenance in overseas markets like US.· Group II supply would face more disruption from plant maintenance work in Europe.· Europe’s Group II supply slumped in H1 2024 because of plant-maintenance work in the region..· Maintenance work coincided with seasonal rise in demand in H1 2024.· Impact of any plant maintenance work over coming months would depend on its timing and length, and whether it involved partial or full shutdown..· Europe’s Group III base oils supply could be more mixed.· Arrival in Europe of Group III cargoes from Middle East shows signs of reviving in H2 May 2025 after slowing in April 2025.· Slowdown in shipments coincides with plant maintenance work in Middle East.· Slowdown in shipments would contrast with pick-up in shipments of premium-grade base oils from Spain in April 2025, including steady flows to northwest Europe..· Europe’s Group III 4cSt (low) price discount to 4cSt (high) price narrows in H2 April 2025 after widening steadily over past two years..· Narrower discount could reflect balanced-to-tighter availability of supplies without full set of OEM approvals..US’ February base oils supply slumps.UK’s February base oils output falls.Asia’s Group III imports from Middle East rise in March.Americas/EMEA base oils demand outlook: Week of 5 May.Asia base oils supply outlook: Week of 5 May
