BP’s Castrol saw profit slump in the fourth quarter to its lowest in more than two years in the face of weak demand and high costs.The company’s lower profit joined a host of other major blenders that faced increasingly squeezed margins. It also contrasted with base oils refiners’ firm profit margins, especially for premium-grade base oils.The diverging trend suggested that refiners were able to pass on higher costs more easily than blenders. They also faced steadier demand than blenders.Some blenders sought to counter rising costs by increasing sales and sales volumes in a market where global lube demand slowed during the fourth quarter of the year..Several refiners responded to the slowdown in fourth-quarter demand by trimming base oils output. The moves cut sales and sales volumes. But they helped to support firmer margins..SK Enmove's Q4 profit falls.Group III refiners especially were able to implement the moves because of firm demand for their premium-grade base oils and buyers’ limited alternative supply options.Lube consumers enjoy a larger number of supply options for their lubricant supplies. The wider range of options gives them more leverage over price and choice of lubricant supplier.The dynamic compounds pressure on blenders’ margins at a time when lube demand is slowing.Castrol’s underlying replacement cost profit of $70mn in the fourth quarter fell from $151mn during the previous three months and for a sixth straight quarter from year-earlier levels.Profit was the lowest since the second quarter of 2020. Lockdowns throughout the world at that time slashed demand for everything from motor fuels to lubricants.Profit of $700mn in 2022 fell from $1.04bn in 2021 to the lowest in more than eight years..Shell’s Q4 lube profit falls
BP’s Castrol saw profit slump in the fourth quarter to its lowest in more than two years in the face of weak demand and high costs.The company’s lower profit joined a host of other major blenders that faced increasingly squeezed margins. It also contrasted with base oils refiners’ firm profit margins, especially for premium-grade base oils.The diverging trend suggested that refiners were able to pass on higher costs more easily than blenders. They also faced steadier demand than blenders.Some blenders sought to counter rising costs by increasing sales and sales volumes in a market where global lube demand slowed during the fourth quarter of the year..Several refiners responded to the slowdown in fourth-quarter demand by trimming base oils output. The moves cut sales and sales volumes. But they helped to support firmer margins..SK Enmove's Q4 profit falls.Group III refiners especially were able to implement the moves because of firm demand for their premium-grade base oils and buyers’ limited alternative supply options.Lube consumers enjoy a larger number of supply options for their lubricant supplies. The wider range of options gives them more leverage over price and choice of lubricant supplier.The dynamic compounds pressure on blenders’ margins at a time when lube demand is slowing.Castrol’s underlying replacement cost profit of $70mn in the fourth quarter fell from $151mn during the previous three months and for a sixth straight quarter from year-earlier levels.Profit was the lowest since the second quarter of 2020. Lockdowns throughout the world at that time slashed demand for everything from motor fuels to lubricants.Profit of $700mn in 2022 fell from $1.04bn in 2021 to the lowest in more than eight years..Shell’s Q4 lube profit falls
