· US gasoline demand extends rise in early September for twenty-third week in twenty four..· US base oils/lube demand likely to get steady support from expectations of firm-to-higher prices.· Trend contrasts with incentive for blenders to delay procurement plans throughout 1H 2023 in face of regular posted-price cuts.· Wave of price-cuts compounded domestic lube demand weakness in 1H 2023 as blenders sought to trim inventories.· Higher prices now coincide with blenders’ lower stocks and seasonal pick-up in demand.· Signs of still-high US base oils exports in Q3 2023 cushion slowdown in domestic consumption, slows build-up of surplus supplies..· Latin America’s June lube consumption holds in narrow range as firmer demand in Brazil and Argentina counter slowdown in other key markets like Mexico.· Steadier consumption in 1H 2023 contrasts with more volatile demand in US, falling consumption in Europe and Asia..· Any slowdown in Latin America’s lube consumption would compound impact of demand weakness in those other markets.· Steady demand provides valuable outlet for US base oils supplies, especially with less feasible arbitrage from other markets.· Automobile sales in Latin America’s largest markets mostly hold firm or rise in August, extending strong growth for more than a year..· Brazil’s July base oils supply stays high, maintaining surplus over demand close to nine-month high..· Higher-than-usual surplus for second month triggers supply-build ahead of scheduled plant maintenance in the country.· Rising surplus coincides with similar increase in surplus supplies in Argentina, reflecting pick-up in US shipments to South America’s largest markets.· Trend likely to curb impact of plant maintenance work in Brazil, could trigger slowdown in requirements if supply-build continues..· Europe’s base oils demand likely to get support from seasonal pick-up in consumption and balanced-to-tight supply.· Strength of pick-up in consumption likely to be lower than usual amid weak economic growth.· Strength of pick-up in consumption likely to be stronger than last year when blenders’ high stocks curbed need to replenish inventories.· Germany’s June lube demand falls for twenty-fourth month but at slowest pace in nine months.· Contraction highlights sustained pressure on demand in Germany, contrasts with steadier lube demand in other regions in Europe.· Slower pace of fall in Germany’s lube exports could provide some support if trend continues..· Germany’s June lube supply extends slide, slashing 1H 2023 supply to lowest in more than five years..· Germany’s sliding lube supply cuts requirements for feedstock base oils supplies.· Trend shows little sign of slowing..· Turkey’s rising Group I base oils imports in first seven months of 2023 reflect rise in shipments from Russia and Italy..· Shipments from Italy recover after Mediterranean country’s supplies slumped in 1H 2022 because of extended plant shutdown.· Any further prolonged plant shutdown in Italy would likely curb its shipments again, leaving opportunity for further rise in shipments from Russia to Turkey.· West Africa’s buyers face additional challenge of securing sufficient supplies as availability of spot shipments tightens..Global base oils - week of Sep 11: Price outlook - arbitrage.Base Oil News stories and analysis also available on ICIS platform
