· US base oils prices maintain firm premium to feedstock/competing fuel prices.· Firm premium sustains incentive for refiners to maintain or raise base oils output.· Tighter US supply during Q2 2024 shows signs of extending into early Q3 2024..· Tighter supply coincides with dip in US’ May base oils/lube exports to seven-month low, first year-on-year fall since July 2023..· Lower exports follow jump in US base oils export prices, closing arbitrage to multiple outlets.· Slowdown in shipments to outlets like Africa and India in May 2024 coincide with less workable arbitrage.· Lower exports, dip in arbitrage shipments and higher export prices point to tighter supply.· Tighter supply partly reflects impact of plant maintenance work, also points to steady-to-firm domestic demand.· Exports show signs of improving in June 2024 to key outlets of Europe and Latin America.· A pick-up in shipments would likely keep US supply balanced-to-tight heading into start of Q3 2024.· A pick-up in shipments could have reflected expectations of seasonal slowdown in domestic demand in months of July and August.· A pick-up in shipments preceded the recent hurricane that struck the US Gulf coast region in early July 2024.· A pick-up in shipments and stronger-than-expected domestic demand could leave US supply tighter than expected..· US base oils imports fall for thirteenth month in May 2024 on dip in shipments from Middle East, lower-than-usual supplies from Asia..· Drop in imports follows slump in US Group III prices relative to Group II prices and relative to prices in other regions.· US Group III base oils prices remain unusually weak relative to Group II prices and relative to prices in other regions.· Weak prices raise prospect of sustained drop in import volumes.· Slowdown in shipments from South Korea to US in June 2024 likely to trigger sharp fall in supplies from northeast Asia reaching the US in Aug 2024.· Lower imports and lower exports raise prospect of US domestic supplies accounting for larger share of rising domestic demand.· Trend would reflect US refiners’ focus on maximising sales and tapping higher prices in country’s domestic market. .· Europe’s firm Group I prices relative to feedstock and competing fuel prices likely to sustain incentive for region’s refiners to maintain or raise output of the product.· Europe’s tighter Group I base oils supply has growing side-effects, from surge in shipments from Russia to Turkey, to more regular flows from US to Europe and from US to north Africa.· Europe’s Group II base oils supply shows signs of staying balanced-to-tight in Q2 2024 as slide in US exports to Europe in May 2024 coincides with expected recovery in region’s base oils output..· US exports to Europe show signs of recovering in June 2024, with several large shipments scheduled to reach Europe in July 2024.· Any pick-up in US supplies in July 2024 would likely coincide with steady regional output at a time when demand faces a seasonal slowdown.· Europe’s Group III base oils supply set to get boost from delivery of more shipments of Asia-Pacific origin during July 2024.· Supplies in Middle East could start to balance out amid signs of ongoing slowdown in shipments to the region from key sources like Asia..Asia base oils supply outlook: Week of 15 July.Americas/EMEA base oils demand outlook: Week of 15 July.Global base oils margins outlook: Week of 15 July.Global base oils arb outlook: Week of 15 July
· US base oils prices maintain firm premium to feedstock/competing fuel prices.· Firm premium sustains incentive for refiners to maintain or raise base oils output.· Tighter US supply during Q2 2024 shows signs of extending into early Q3 2024..· Tighter supply coincides with dip in US’ May base oils/lube exports to seven-month low, first year-on-year fall since July 2023..· Lower exports follow jump in US base oils export prices, closing arbitrage to multiple outlets.· Slowdown in shipments to outlets like Africa and India in May 2024 coincide with less workable arbitrage.· Lower exports, dip in arbitrage shipments and higher export prices point to tighter supply.· Tighter supply partly reflects impact of plant maintenance work, also points to steady-to-firm domestic demand.· Exports show signs of improving in June 2024 to key outlets of Europe and Latin America.· A pick-up in shipments would likely keep US supply balanced-to-tight heading into start of Q3 2024.· A pick-up in shipments could have reflected expectations of seasonal slowdown in domestic demand in months of July and August.· A pick-up in shipments preceded the recent hurricane that struck the US Gulf coast region in early July 2024.· A pick-up in shipments and stronger-than-expected domestic demand could leave US supply tighter than expected..· US base oils imports fall for thirteenth month in May 2024 on dip in shipments from Middle East, lower-than-usual supplies from Asia..· Drop in imports follows slump in US Group III prices relative to Group II prices and relative to prices in other regions.· US Group III base oils prices remain unusually weak relative to Group II prices and relative to prices in other regions.· Weak prices raise prospect of sustained drop in import volumes.· Slowdown in shipments from South Korea to US in June 2024 likely to trigger sharp fall in supplies from northeast Asia reaching the US in Aug 2024.· Lower imports and lower exports raise prospect of US domestic supplies accounting for larger share of rising domestic demand.· Trend would reflect US refiners’ focus on maximising sales and tapping higher prices in country’s domestic market. .· Europe’s firm Group I prices relative to feedstock and competing fuel prices likely to sustain incentive for region’s refiners to maintain or raise output of the product.· Europe’s tighter Group I base oils supply has growing side-effects, from surge in shipments from Russia to Turkey, to more regular flows from US to Europe and from US to north Africa.· Europe’s Group II base oils supply shows signs of staying balanced-to-tight in Q2 2024 as slide in US exports to Europe in May 2024 coincides with expected recovery in region’s base oils output..· US exports to Europe show signs of recovering in June 2024, with several large shipments scheduled to reach Europe in July 2024.· Any pick-up in US supplies in July 2024 would likely coincide with steady regional output at a time when demand faces a seasonal slowdown.· Europe’s Group III base oils supply set to get boost from delivery of more shipments of Asia-Pacific origin during July 2024.· Supplies in Middle East could start to balance out amid signs of ongoing slowdown in shipments to the region from key sources like Asia..Asia base oils supply outlook: Week of 15 July.Americas/EMEA base oils demand outlook: Week of 15 July.Global base oils margins outlook: Week of 15 July.Global base oils arb outlook: Week of 15 July