· US central bank expected to pause on additional interest-rate increases, with US economy already facing growing pressure from wave of rate-increases over past year.· US gasoline demand rises in last week of April for sixth week, but at slowest pace in more than a month..· US base oils demand likely to get support from belated round of stock replenishment after blenders held off in Q1 and early Q2.· Fall in US posted prices in April eased concern about exposure to lower prices, raising prospect of pick-up in demand.· Fall in crude oil prices in recent weeks could revive concern of lower prices, adding to buyers’ caution.· Recent/ongoing US base oils supply overhang highlights impact of prices on domestic/overseas demand.· US base oils exports typically rise in month of February, cushioning seasonal slowdown in domestic demand early in the year.· Fall in US base oils exports in February instead compounded impact of weak domestic demand..· Slump in demand highlights cost of prices that limited arbitrage opportunities to move surplus supplies to overseas markets.· US prices faced prospect of falling more than required to clear surplus that became unnecessarily large.· Europe’s central bank likely to raise interest rates further amid ongoing fight to control inflation.· Europe’s economic growth likely to remain muted over coming months.· Europe’s lube demand likely to hold firm through Q2, even if staying below year-earlier levels..· Firm demand boosts need for blenders to replenish base oils inventories.· Base oils demand could get further support from blenders’ shorter timeframe to replenish stocks that are lower than usual.· Europe’s February lube demand rose to three-month high.· Blenders held off replenishing stocks in Q1 even amid widespread pick-up in consumption vs end-2022.· Blenders’ base oils stocks likely fell to lower-than-usual levels as they held off replenishing inventories even as demand rose.· Falling crude oil prices and weak economic growth complicate blenders’ current stock-replenishment plans, add to incentive to maintain lower inventories than usual.· European blenders procured more base oils supplies than they required in 1H 2022, leaving overhang of high-priced surplus supplies that took time to clear.· Blenders show signs of avoiding a repeat of last year’s move by procuring smaller volumes of base oils.· Trend raises prospect of avoiding repeat of sustained slowdown in demand in 2H 2022 as blenders keep topping up stocks..Global base oils - week of May 8: Demand outlook
· US central bank expected to pause on additional interest-rate increases, with US economy already facing growing pressure from wave of rate-increases over past year.· US gasoline demand rises in last week of April for sixth week, but at slowest pace in more than a month..· US base oils demand likely to get support from belated round of stock replenishment after blenders held off in Q1 and early Q2.· Fall in US posted prices in April eased concern about exposure to lower prices, raising prospect of pick-up in demand.· Fall in crude oil prices in recent weeks could revive concern of lower prices, adding to buyers’ caution.· Recent/ongoing US base oils supply overhang highlights impact of prices on domestic/overseas demand.· US base oils exports typically rise in month of February, cushioning seasonal slowdown in domestic demand early in the year.· Fall in US base oils exports in February instead compounded impact of weak domestic demand..· Slump in demand highlights cost of prices that limited arbitrage opportunities to move surplus supplies to overseas markets.· US prices faced prospect of falling more than required to clear surplus that became unnecessarily large.· Europe’s central bank likely to raise interest rates further amid ongoing fight to control inflation.· Europe’s economic growth likely to remain muted over coming months.· Europe’s lube demand likely to hold firm through Q2, even if staying below year-earlier levels..· Firm demand boosts need for blenders to replenish base oils inventories.· Base oils demand could get further support from blenders’ shorter timeframe to replenish stocks that are lower than usual.· Europe’s February lube demand rose to three-month high.· Blenders held off replenishing stocks in Q1 even amid widespread pick-up in consumption vs end-2022.· Blenders’ base oils stocks likely fell to lower-than-usual levels as they held off replenishing inventories even as demand rose.· Falling crude oil prices and weak economic growth complicate blenders’ current stock-replenishment plans, add to incentive to maintain lower inventories than usual.· European blenders procured more base oils supplies than they required in 1H 2022, leaving overhang of high-priced surplus supplies that took time to clear.· Blenders show signs of avoiding a repeat of last year’s move by procuring smaller volumes of base oils.· Trend raises prospect of avoiding repeat of sustained slowdown in demand in 2H 2022 as blenders keep topping up stocks..Global base oils - week of May 8: Demand outlook
