· Americas/Europe base oils demand likely to get support from higher prices, balanced-to-tighter supplies.· Lube demand turns more mixed in Latin America; demand in Mediterranean region shows signs of extending recovery.· US gasoline demand rises in early September for twenty-fourth week in twenty five..· US base oils demand could get temporary boost after US refiners raise posted prices for second month running.· Narrowing posted-price premium to feedstock and competing fuel prices had raised prospect of such a move.· Blenders could seek to lock in additional supplies before the new prices come into effect.· Blenders will face more pressure to raise finished lube prices following second base oils price-rise.· Any such moves likely to be more difficult in face of softer-than-usual end-user demand..· US’ July Group III base oils imports fall year-on-year for third month on sustained dip in supplies from Mideast Gulf..· Trend suggests supplies from Mideast Gulf more sensitive to prices than supplies from Asia.· Steady recovery in US Group III prices vs Europe prices since late-June 2023 raise prospect of more shipments moving to US.· US Group III imports from Asia likely dropped in August on slowdown in shipments from South Korea; imports then likely to recover in September..· Mexico’s lube demand falls in July for third month and to lowest in almost two years..· Any extension of that trend would curb the country’s demand for base oils supplies used for the production of finished lubricants.· Such a trend would have less impact on demand for very-light grade base oils unless US export prices rise further..· Peru continues to take delivery of steady flow of Group II heavy grades and bright stock from Asia, reflecting still-open arbitrage for those shipments.· US share of Peru’s base oils imports stays lower than usual, reflecting impact of the Asia supplies..· Rising US prices vs Asia prices could make the arbitrage even more attractive.· US’ July base oils exports to Brazil rise to one-year high as Latin American country builds stocks ahead of plant shutdowns in Q3-Q4 2023.· Brazil’s demand for overseas base oils supplies could subsequently slow down once sufficient supplies are secured..· Portugal’s July lube demand falls for fourth time in five months.· Slowdown contrasts with firmer demand in Italy, even steeper slowdown in Germany..· Trend points to ongoing regionwide slowdown in demand combined with more pockets of growth..· Firmer lube demand in Spain in July adds to those pockets of growth..· South Africa’s July base oils imports correct lower from unusually high volume in June, still rise from year-earlier levels for seventh month..· South Africa’s total reliance on base oils imports to cover requirements boosts its attraction as key outlet for supplies from US, Europe and Mideast Gulf.· Europe’s tighter Group I supplies likely to boost South Africa’s requirements from the other sources..· Prices for Group I shipments from Europe to Turkey stay competitive in July versus supplies from Russia..· Trend contrasts with last year, sustains steady demand from Turkey for European supplies, and curbs Turkey’s demand for Russian supplies.· High but more limited flow of shipments from Russia to Turkey increase pressure on Russia's refiners to move more supplies to other markets.· Pressure to find additional outlets rises following completion of plant maintenance work in Russia in Q2 2023..Global base oils - week of Sep 18: Price outlook - arbitrage
· Americas/Europe base oils demand likely to get support from higher prices, balanced-to-tighter supplies.· Lube demand turns more mixed in Latin America; demand in Mediterranean region shows signs of extending recovery.· US gasoline demand rises in early September for twenty-fourth week in twenty five..· US base oils demand could get temporary boost after US refiners raise posted prices for second month running.· Narrowing posted-price premium to feedstock and competing fuel prices had raised prospect of such a move.· Blenders could seek to lock in additional supplies before the new prices come into effect.· Blenders will face more pressure to raise finished lube prices following second base oils price-rise.· Any such moves likely to be more difficult in face of softer-than-usual end-user demand..· US’ July Group III base oils imports fall year-on-year for third month on sustained dip in supplies from Mideast Gulf..· Trend suggests supplies from Mideast Gulf more sensitive to prices than supplies from Asia.· Steady recovery in US Group III prices vs Europe prices since late-June 2023 raise prospect of more shipments moving to US.· US Group III imports from Asia likely dropped in August on slowdown in shipments from South Korea; imports then likely to recover in September..· Mexico’s lube demand falls in July for third month and to lowest in almost two years..· Any extension of that trend would curb the country’s demand for base oils supplies used for the production of finished lubricants.· Such a trend would have less impact on demand for very-light grade base oils unless US export prices rise further..· Peru continues to take delivery of steady flow of Group II heavy grades and bright stock from Asia, reflecting still-open arbitrage for those shipments.· US share of Peru’s base oils imports stays lower than usual, reflecting impact of the Asia supplies..· Rising US prices vs Asia prices could make the arbitrage even more attractive.· US’ July base oils exports to Brazil rise to one-year high as Latin American country builds stocks ahead of plant shutdowns in Q3-Q4 2023.· Brazil’s demand for overseas base oils supplies could subsequently slow down once sufficient supplies are secured..· Portugal’s July lube demand falls for fourth time in five months.· Slowdown contrasts with firmer demand in Italy, even steeper slowdown in Germany..· Trend points to ongoing regionwide slowdown in demand combined with more pockets of growth..· Firmer lube demand in Spain in July adds to those pockets of growth..· South Africa’s July base oils imports correct lower from unusually high volume in June, still rise from year-earlier levels for seventh month..· South Africa’s total reliance on base oils imports to cover requirements boosts its attraction as key outlet for supplies from US, Europe and Mideast Gulf.· Europe’s tighter Group I supplies likely to boost South Africa’s requirements from the other sources..· Prices for Group I shipments from Europe to Turkey stay competitive in July versus supplies from Russia..· Trend contrasts with last year, sustains steady demand from Turkey for European supplies, and curbs Turkey’s demand for Russian supplies.· High but more limited flow of shipments from Russia to Turkey increase pressure on Russia's refiners to move more supplies to other markets.· Pressure to find additional outlets rises following completion of plant maintenance work in Russia in Q2 2023..Global base oils - week of Sep 18: Price outlook - arbitrage