· 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.
