· US gasoline demand rises in early August for twentieth week, at slowest pace since end-April..· US' July automobile sales extend rise for twelfth month; sales expected to continue to rise through 2H 2023.· Latin America’s automobile sales rise in July for fourteenth time in fifteen months, with strong sales in Brazil and Mexico countering slowdown in Argentina, falling demand in Chile..· US refinery posted price-increases barely keep pace with rising crude/diesel prices, raising prospect of further increases.· Price increases reflect higher feedstock costs rather than supply-demand fundamentals.· Any strengthening of supply-demand fundamentals would provide further price support.· Overseas demand for arbitrage shipments from US show signs of holding firm, with more supplies moving to West Africa.· Steady overseas demand reflects still-competitive US export prices and tight supplies from Europe..· Ongoing surge in US exports to South Africa highlights change in the African country’s structural supply, points to rising demand for premium grades.· Ongoing surge in US exports to South Africa coincides with competitive US prices that are able to tap structural rise in demand..· Europe’s base oils demand likely to get support from moves to replenish low stocks, even amid mixed lube consumption throughout region.· Europe’s May lube demand extends slide for eighth month; pace of contraction slows..· Sustained slowdown incentivizes blenders to hold lower feedstock and finished lube stocks..· Germany’s lube demand extends slide through Q2 2023; pace of contraction starts to slow.· Germany’s domestic lube demand falls more slowly than lube production in May for second month..· Trend suggests blenders wary of adjusting output until clearer signs that fall in demand has bottomed out.· Trend curbs blenders’ exposure to prospect of ongoing demand weakness.· Trend raises prospect of blenders’ output lagging any improvement in lube demand..· Portugal’s June lube demand rises for first time in four months to highest since Q1 2022.· Firmer demand contrasts with Germany, mirrors signs of recovery in other Mediterranean markets like Italy..· Trend suggests state of Europe’s lube market turning more fragmented; outright demand less weak than expected.· Europe blenders’ moves to cut inventories partly reflect expectations that demand will continue to fall over coming months. .· Slump in Turkey’s June Group I base oils imports coincide with further sharp deprecation of country’s currency, boosting costs of imports.· Turkey’s demand for base oils of Russian origin shows signs of improving in June, even as prices of European supplies remain competitive..· Firmer demand for Russian supplies instead points to tighter availability from key sources in Europe..· Trend could extend into Q3 2023 as maintenance work continues to limit Europe’s surplus supply of Group I base oils.· Any pick-up Turkey’s demand for Russian base oils would provide boost for Russian refiners amid limited alternative outlets.· Russia could start to face more competition from supplies from Saudi Arabia amid signs of more regular Group I flows from the Mideast Gulf country to Turkey..Global base oils - week of Aug 14: Price outlook - margins
· US gasoline demand rises in early August for twentieth week, at slowest pace since end-April..· US' July automobile sales extend rise for twelfth month; sales expected to continue to rise through 2H 2023.· Latin America’s automobile sales rise in July for fourteenth time in fifteen months, with strong sales in Brazil and Mexico countering slowdown in Argentina, falling demand in Chile..· US refinery posted price-increases barely keep pace with rising crude/diesel prices, raising prospect of further increases.· Price increases reflect higher feedstock costs rather than supply-demand fundamentals.· Any strengthening of supply-demand fundamentals would provide further price support.· Overseas demand for arbitrage shipments from US show signs of holding firm, with more supplies moving to West Africa.· Steady overseas demand reflects still-competitive US export prices and tight supplies from Europe..· Ongoing surge in US exports to South Africa highlights change in the African country’s structural supply, points to rising demand for premium grades.· Ongoing surge in US exports to South Africa coincides with competitive US prices that are able to tap structural rise in demand..· Europe’s base oils demand likely to get support from moves to replenish low stocks, even amid mixed lube consumption throughout region.· Europe’s May lube demand extends slide for eighth month; pace of contraction slows..· Sustained slowdown incentivizes blenders to hold lower feedstock and finished lube stocks..· Germany’s lube demand extends slide through Q2 2023; pace of contraction starts to slow.· Germany’s domestic lube demand falls more slowly than lube production in May for second month..· Trend suggests blenders wary of adjusting output until clearer signs that fall in demand has bottomed out.· Trend curbs blenders’ exposure to prospect of ongoing demand weakness.· Trend raises prospect of blenders’ output lagging any improvement in lube demand..· Portugal’s June lube demand rises for first time in four months to highest since Q1 2022.· Firmer demand contrasts with Germany, mirrors signs of recovery in other Mediterranean markets like Italy..· Trend suggests state of Europe’s lube market turning more fragmented; outright demand less weak than expected.· Europe blenders’ moves to cut inventories partly reflect expectations that demand will continue to fall over coming months. .· Slump in Turkey’s June Group I base oils imports coincide with further sharp deprecation of country’s currency, boosting costs of imports.· Turkey’s demand for base oils of Russian origin shows signs of improving in June, even as prices of European supplies remain competitive..· Firmer demand for Russian supplies instead points to tighter availability from key sources in Europe..· Trend could extend into Q3 2023 as maintenance work continues to limit Europe’s surplus supply of Group I base oils.· Any pick-up Turkey’s demand for Russian base oils would provide boost for Russian refiners amid limited alternative outlets.· Russia could start to face more competition from supplies from Saudi Arabia amid signs of more regular Group I flows from the Mideast Gulf country to Turkey..Global base oils - week of Aug 14: Price outlook - margins