· US economic growth shows signs of slowing but remains unexpectedly firm.· US weekly gasoline demand rises for eleventh week; pace of increase slowest in more than a month..· More US refiners cut posted prices, narrowing posted price premium to spot prices.· Lower US posted prices could spur pick-up in demand from blenders that had held back in anticipation of such a move.· Size of rise in demand could be muted if lower buying interest instead reflected blenders’ moves to hold lower inventories than previously.· Demand typically gets support ahead of/during Atlantic hurricane season as companies build buffer-stocks in case of supply disruptions.· Any lack of such a move leaves buyers and sellers exposed to unexpected disruptions – magnifying the impact of those disruptions.· Steady flows of Group I base oils from Indonesia to Latin America reflect open arbitrage and steady demand for products like bright stock.· Latin America’s firm lube consumption in March contrasts with slide in US demand, adding to attraction of targeting that region with base oils supplies..· Brazil’s demand for overseas supplies likely to hold steady amid relatively balanced supply-demand fundamentals in recent months..· Eurozone’s economy shrinks in Q4 2022 and Q1 2023, faces more pressure in coming months from rising interest rates.· UK’s May car sales rise for tenth month.· UK’s May sales of alternative-energy vehicle sales hold above 50pc of total sales for ninth month..· Europe’s lube demand shows signs of slowing in early Q2 from March, extending year-on-year contraction.· Trend adds to blenders’ preference and flexibility to hold lower inventories.· Trend likely to leave blenders with more balanced feedstock supplies heading into Q3 2023, contrasting with large surplus the same time a year earlier.· Trend would support steadier demand in Q3 2023 vs same time last year.· Europe’s Q2 2023 Group II supplies from US show signs of staying lower than usual, keeping fundamentals relatively balanced..· Lack of supply-build likely to limit extent of any downward price-pressure in Q3 2023.· Turkey’s Group I base oils demand for supplies of Russian origin could rise as plant-maintenance work cuts availability from Mediterranean region in Q2 2023.· Access to Turkish market increasingly important for Russian supplies in view of limited alternative outlets.· Completion of plant maintenance in Europe/Russia in Q2 likely to boost competition for buyers in Turkey in Q3 2023..· Prices for supplies of Russian origin would need to move to steeper discount to shipments from Europe to boost Turkey’s interest in taking more Russian supplies.· Turkey’s stronger demand for Group I base oils over premium-grade base oils this year suggests that price and availability also influence Group I and premium-grade requirements.· Resumption of Turkey’s domestic base oils production from end-Q1 2023 boosts supply, could curb domestic buyers’ requirements for overseas supplies.· Turkey’s currency depreciation adds to attraction of procuring supplies from domestic producer..Asia base oils – week of June 12: Demand outlook.Contact us for more information about the data for these stories.Base Oil News stories and analysis also available on ICIS platform
