· Asia’s base oils supply stays balanced to tight, likely to improve over coming month.· Arbitrage to move Asia shipments to other regions like Europe and Latin America likely to stay hard to work.· Arbitrage to move US shipments to Asia stays more feasible, raising prospect of continuation of US supplies moving to the region.· Arbitrage to move Europe Group I supplies to Asia stays more feasible.· Fire at South Korean refinery raises uncertainty about impact on supply from that market.· Taiwan’s Group II base oils exports recover slowly since mid-Feb 2024..· Asia’s Group I base oils supply likely to remain tight at least for the next month.· Exports from China show signs of slowing amid seasonal rise in domestic demand and ahead of upcoming plant maintenance work.· Thailand’s Group I base oils supply likely to remain tight as refiners replenish stocks after maintenance work.· Singapore’s base oils exports stay rangebound.· Singapore’s Group I base oils supply likely to remain tight amid ongoing slump/pause in imports from markets like Japan, China and Europe..· Singapore’s Group I supply gets a boost following arrival of large cargo of Russian origin in 2H Feb 2024..· Asia’s base oils output falls more sharply than regional demand in Dec 2023, cutting surplus..· Asia’s lower base oils supply surplus at start of 2024 contrasts with much higher surplus at start of 2023.· Lower surplus leaves region’s refiners better-positioned to maintain firmer margins during seasonal rise in demand over coming months.· Refiners’ improved leverage over prices and margins highlights benefit of managing supply carefully. .· Southeast Asia remains largest outlet for Singapore’s base oils exports in Jan 2024..· Southeast Asia’s growing base oils demand facilitates Singapore’s moves to expand its markets and cut any over-reliance on any single market.· Trend cushions against China’s slowdown in base oils requirements from overseas markets.· Trend cushions against prospect of similar trend in India in coming years..· India’s base oils imports from Saudi Arabia show signs of slowing in Feb 2024.· Any such slowdown likely to boost domestic buyers’ demand for supplies from other sources.· Shipment time for supplies from other sources like South Korea or US would be longer than shipments from Saudi Arabia..· Asia’s January base oils exports to the Mideast Gulf rebound from sixteen-month low in Dec 2023.· Mideast Gulf market provided key outlet for surplus supplies from Asia in 2023..· Start-up and availability of premium-grade supplies from India over the coming year could impact Mideast Gulf’s demand for premium-grade supplies from Asia..Asia base oils demand outlook: Week of Feb 26.Global base oils arb outlook: Week of Feb 26.Global base oils margins outlook: Week of Feb 26.Global base oils cargo flows: Week of Feb 26
