· Diesel prices hold firm vs crude oil, contrasting with weaker base oils values.· Trend incentivizes refiners to focus more on middle distillates.· Plant maintenance work in Europe in Q3 2023 likely to limit Group I supply-build.· Europe’s Group III supply likely to get boost from revival in shipments from Spain, following completion of plant maintenance work in that market.· Europe likely to attract more arbitrage shipments from US/Asia.· Europe’s supply likely to stay within region amid closed arbitrage to other markets.· Scant scheduled plant maintenance work in US in Q3 2023 raises prospect of pick-up in supply unless refiners trim run-rates, maintain high exports.· US’ May base oils exports rise to record-high, extend surge in overseas shipments since end of Q1 2023..· Wave of US shipments boosts supply in other overseas markets, clears surplus from US market.· Wave of US exports in Q2 2023 likely leaves US market better balanced in Q3 2023.· Still-closed arbitrage to move Group II base oils from Asia to Americas likely to sustain steady US exports to Americas over coming months. · Record-high US exports in May coincide with slump in US base oils imports..· Trend reflects weakness of domestic Group III market, likely to support sharp fall in surplus US inventories.· Surge in US’ net exports so far this year contrasts with imports exceeding exports during 2H 2022.· US’ relative price-weakness this year reflects time-lag as supply-demand balance takes time to revert to more typical levels.· US price-weakness this year highlights repercussions and costs of supply exceeding demand for sustained period.· US’ May base oils exports to Europe rise to ten-month high, adding to region’s healthy availability of premium-grade base oils during Q2 2023..· Brazil’s base oils supply-demand fundamentals stay unusually balanced in 1H 2023..· Tight supply coincides with firmer-than-expected demand, raises prospect of steady demand for shipments from US in Q3 2023.· Closed arbitrage from Asia to Brazil likely to add to country’s demand for supplies from US.· Americas base oils supply falls in first four months of the year to lowest in more than five years..· Trend highlights impact of demand as key influence on prices so far this year, and likely impact on prices of any improvement in demand..Global base oils - week of July 17: Price outlook - margins
· Diesel prices hold firm vs crude oil, contrasting with weaker base oils values.· Trend incentivizes refiners to focus more on middle distillates.· Plant maintenance work in Europe in Q3 2023 likely to limit Group I supply-build.· Europe’s Group III supply likely to get boost from revival in shipments from Spain, following completion of plant maintenance work in that market.· Europe likely to attract more arbitrage shipments from US/Asia.· Europe’s supply likely to stay within region amid closed arbitrage to other markets.· Scant scheduled plant maintenance work in US in Q3 2023 raises prospect of pick-up in supply unless refiners trim run-rates, maintain high exports.· US’ May base oils exports rise to record-high, extend surge in overseas shipments since end of Q1 2023..· Wave of US shipments boosts supply in other overseas markets, clears surplus from US market.· Wave of US exports in Q2 2023 likely leaves US market better balanced in Q3 2023.· Still-closed arbitrage to move Group II base oils from Asia to Americas likely to sustain steady US exports to Americas over coming months. · Record-high US exports in May coincide with slump in US base oils imports..· Trend reflects weakness of domestic Group III market, likely to support sharp fall in surplus US inventories.· Surge in US’ net exports so far this year contrasts with imports exceeding exports during 2H 2022.· US’ relative price-weakness this year reflects time-lag as supply-demand balance takes time to revert to more typical levels.· US price-weakness this year highlights repercussions and costs of supply exceeding demand for sustained period.· US’ May base oils exports to Europe rise to ten-month high, adding to region’s healthy availability of premium-grade base oils during Q2 2023..· Brazil’s base oils supply-demand fundamentals stay unusually balanced in 1H 2023..· Tight supply coincides with firmer-than-expected demand, raises prospect of steady demand for shipments from US in Q3 2023.· Closed arbitrage from Asia to Brazil likely to add to country’s demand for supplies from US.· Americas base oils supply falls in first four months of the year to lowest in more than five years..· Trend highlights impact of demand as key influence on prices so far this year, and likely impact on prices of any improvement in demand..Global base oils - week of July 17: Price outlook - margins