· US base oils demand likely to stay muted as buyers focus on working down feedstock and finished lube inventories over coming weeks.· Prospect of sufficient supply, and ongoing fall in base oils prices, adds to attraction of holding back.· Overseas demand for US supplies could be more mixed, with more muted buying interest in Latin America and firmer demand in Europe and India..· Latin America’s base oils demand for US supplies could be more muted amid more balanced regional supply fundamentals in Q4 2024.· Region’s lube demand falls in Aug 2024 for first time in three months amid sliding consumption in Mexico, Argentina..· Any extension of demand contraction would compound likely seasonal dip in region’s lube demand in Q4 2024.· Lower demand, steady regional output and steady exports from US to Latin America would likely flip recent supply shortfall back to surplus..· Weakening demand fundamentals would curb buyers’ need for marked pick-up in arbitrage shipments from US over coming months.· Any such pick-up in shipments could instead leave Latin America with growing surplus..· Mexico’s lube demand falls in Aug 2024 for ninth time in ten months as automobile and industrial oils consumption slides..· Sustained slowdown in demand puts pressure on Brazil’s lube consumption to keep growing to avoid steeper drop in Latin America’s lube demand..· Chile’s three-month-average base oils imports fall in Sept 2024 for second time in three months.· Chile’s base oils imports duly fall in Q3 2024 from year earlier for first time in a year..· Chile’s base oils imports rise in Sept 2024 from year earlier for first time in three months, suggesting slowdown could be bottoming out.· Chile’s muted rise in imports in Jan-Sept 2024 from year-earlier levels suggest any sustained recovery is likely to be small. .· Europe’s weak lube demand likely to continue to incentivize blenders to maintain lower base oils inventories.· Lube demand in some of Europe’s largest markets falls in Aug 2024 for third time in four months..· Sliding demand compounds seasonal dip in consumption during summer months.· Falling demand contrasts with regional base oils prices that incentivize overseas refiners to target Europe with more supplies.· Trend raises prospect of Europe supply outpacing demand.· That scenario shows signs of already materialising from Q2 2024 and into start of Q3 2024..· Any extension of that trend through rest of Q3 2024 could put more pressure on adjustment in supply or prices..· Europe’s Group I prices begin to stabilize relative to premium-grade base oils.· Steadier prices follows slide in Group I prices relative to premium-grade base oils in recent weeks even with signs of increasingly plentiful premium-grade supplies..· Recent shipments to markets like West Africa and southeast Asia point to sufficient Group I supply despite structural drop in regional output.· Dynamic points to weaker Group I base oils demand relative to premium-grade base oils.· Europe’s Group II base oils demand could be more muted as steady availability gives buyers option to procure on need-to basis.· Europe’s Group III base oils demand could get support from competitive price vs Group II base oils.· Signs of ready availability of supply, despite plant maintenance work, adds to attraction of using more Group III base oils.· Ready availability of supply partly reflects benefit of multiple supply sources..· Demand in Middle East could hold steady amid signs buyers maintained sufficient inventories, curbing urgency to buy.· South Korea’s base oils exports to Middle East fall less sharply than to other outlets in Sept 2024..· Steadier flows help to sustain buyers’ stocks at comfortable levels, cushioning impact of signs of delayed pick-up in arbitrage shipments from US..Asia base oils demand outlook: Week of 21 Oct.Global base oils margins outlook: Week of 21 Oct.Global base oils arb outlook: Week of 21 Oct .Global base oils cargo flows: Week of 21 Oct
· US base oils demand likely to stay muted as buyers focus on working down feedstock and finished lube inventories over coming weeks.· Prospect of sufficient supply, and ongoing fall in base oils prices, adds to attraction of holding back.· Overseas demand for US supplies could be more mixed, with more muted buying interest in Latin America and firmer demand in Europe and India..· Latin America’s base oils demand for US supplies could be more muted amid more balanced regional supply fundamentals in Q4 2024.· Region’s lube demand falls in Aug 2024 for first time in three months amid sliding consumption in Mexico, Argentina..· Any extension of demand contraction would compound likely seasonal dip in region’s lube demand in Q4 2024.· Lower demand, steady regional output and steady exports from US to Latin America would likely flip recent supply shortfall back to surplus..· Weakening demand fundamentals would curb buyers’ need for marked pick-up in arbitrage shipments from US over coming months.· Any such pick-up in shipments could instead leave Latin America with growing surplus..· Mexico’s lube demand falls in Aug 2024 for ninth time in ten months as automobile and industrial oils consumption slides..· Sustained slowdown in demand puts pressure on Brazil’s lube consumption to keep growing to avoid steeper drop in Latin America’s lube demand..· Chile’s three-month-average base oils imports fall in Sept 2024 for second time in three months.· Chile’s base oils imports duly fall in Q3 2024 from year earlier for first time in a year..· Chile’s base oils imports rise in Sept 2024 from year earlier for first time in three months, suggesting slowdown could be bottoming out.· Chile’s muted rise in imports in Jan-Sept 2024 from year-earlier levels suggest any sustained recovery is likely to be small. .· Europe’s weak lube demand likely to continue to incentivize blenders to maintain lower base oils inventories.· Lube demand in some of Europe’s largest markets falls in Aug 2024 for third time in four months..· Sliding demand compounds seasonal dip in consumption during summer months.· Falling demand contrasts with regional base oils prices that incentivize overseas refiners to target Europe with more supplies.· Trend raises prospect of Europe supply outpacing demand.· That scenario shows signs of already materialising from Q2 2024 and into start of Q3 2024..· Any extension of that trend through rest of Q3 2024 could put more pressure on adjustment in supply or prices..· Europe’s Group I prices begin to stabilize relative to premium-grade base oils.· Steadier prices follows slide in Group I prices relative to premium-grade base oils in recent weeks even with signs of increasingly plentiful premium-grade supplies..· Recent shipments to markets like West Africa and southeast Asia point to sufficient Group I supply despite structural drop in regional output.· Dynamic points to weaker Group I base oils demand relative to premium-grade base oils.· Europe’s Group II base oils demand could be more muted as steady availability gives buyers option to procure on need-to basis.· Europe’s Group III base oils demand could get support from competitive price vs Group II base oils.· Signs of ready availability of supply, despite plant maintenance work, adds to attraction of using more Group III base oils.· Ready availability of supply partly reflects benefit of multiple supply sources..· Demand in Middle East could hold steady amid signs buyers maintained sufficient inventories, curbing urgency to buy.· South Korea’s base oils exports to Middle East fall less sharply than to other outlets in Sept 2024..· Steadier flows help to sustain buyers’ stocks at comfortable levels, cushioning impact of signs of delayed pick-up in arbitrage shipments from US..Asia base oils demand outlook: Week of 21 Oct.Global base oils margins outlook: Week of 21 Oct.Global base oils arb outlook: Week of 21 Oct .Global base oils cargo flows: Week of 21 Oct