· Base oils demand likely to stay muted on expectations that supply will remain readily available.· US gasoline consumption rises at end-June for fifteenth week and at fastest pace in more than two months..· US auto sales get sustained support from pent-up demand and improved availability but face growing pressure from rising financing costs.· Possibility of a further drop in US posted prices could add to US blenders’ preference to hold back for now.· Any such preference to hold off would follow US Group III base oils supplier’s announcement of further posted price-cut from beginning of July.· Blenders’ preference to maintain low stocks leaves them exposed to any unexpected supply disruptions during Atlantic hurricane season.· US domestic base oils/lube demand lags exports in early Q2 2023 for second time in as many months, reflecting growing importance of overseas markets to maintain supply-balance..· Base oil/lube exports accounted for lower-than-usual share of US’ total demand in 2H 2022.· Period coincided with closed arbitrage from US, and open arbitrage from Asia/Europe/Mideast Gulf to Americas.· Period coincided with rising US base oils/lube inventories.· Trend highlights importance of maintaining higher share of exports to avoid domestic supply-build.· US base oils exports show signs of staying unusually high at least through May.· US exports show signs of staying higher than usual in June, even if down from May levels.· Europe’s base oils demand likely to stay muted but steady, with blenders holding lower stocks than same time last year.· UK’s June car sales rise for eleventh month, with alternative-fuel vehicles accounting for the largest share since last December..· Netherlands’ base oils demand gets sustained support from rise in exports to buyers in Europe in early Q2 2023. · Trend counters slowdown in shipments to markets outside the region.· Rise in shipments within Europe helps balance out loss of Group I supplies of Russian origin, coincides with weaker-than-usual regional demand.· Turkey’s demand for Group I supplies of Russian origin likely to rise in face of higher European prices relative to Russian supplies, and drop in supplies from Italy and Greece.· Pick-up in demand would follow slowdown in Turkey’s base oils imports from Russia so far this year..· South Africa’s sustained rise in base oils imports over past year likely to continue as prolonged shutdown of country’s sole base oils plant leaves it reliant on imports to cover requirements..Global base oils - week of July 10: Price outlook - arbitrage
· Base oils demand likely to stay muted on expectations that supply will remain readily available.· US gasoline consumption rises at end-June for fifteenth week and at fastest pace in more than two months..· US auto sales get sustained support from pent-up demand and improved availability but face growing pressure from rising financing costs.· Possibility of a further drop in US posted prices could add to US blenders’ preference to hold back for now.· Any such preference to hold off would follow US Group III base oils supplier’s announcement of further posted price-cut from beginning of July.· Blenders’ preference to maintain low stocks leaves them exposed to any unexpected supply disruptions during Atlantic hurricane season.· US domestic base oils/lube demand lags exports in early Q2 2023 for second time in as many months, reflecting growing importance of overseas markets to maintain supply-balance..· Base oil/lube exports accounted for lower-than-usual share of US’ total demand in 2H 2022.· Period coincided with closed arbitrage from US, and open arbitrage from Asia/Europe/Mideast Gulf to Americas.· Period coincided with rising US base oils/lube inventories.· Trend highlights importance of maintaining higher share of exports to avoid domestic supply-build.· US base oils exports show signs of staying unusually high at least through May.· US exports show signs of staying higher than usual in June, even if down from May levels.· Europe’s base oils demand likely to stay muted but steady, with blenders holding lower stocks than same time last year.· UK’s June car sales rise for eleventh month, with alternative-fuel vehicles accounting for the largest share since last December..· Netherlands’ base oils demand gets sustained support from rise in exports to buyers in Europe in early Q2 2023. · Trend counters slowdown in shipments to markets outside the region.· Rise in shipments within Europe helps balance out loss of Group I supplies of Russian origin, coincides with weaker-than-usual regional demand.· Turkey’s demand for Group I supplies of Russian origin likely to rise in face of higher European prices relative to Russian supplies, and drop in supplies from Italy and Greece.· Pick-up in demand would follow slowdown in Turkey’s base oils imports from Russia so far this year..· South Africa’s sustained rise in base oils imports over past year likely to continue as prolonged shutdown of country’s sole base oils plant leaves it reliant on imports to cover requirements..Global base oils - week of July 10: Price outlook - arbitrage
