· US base oils demand faces seasonal slowdown at end-2023, start of 2024.· Low feedstock prices and expectations of healthy availability add to preference to hold back.· Buyers’ low stocks could trigger earlier revival in demand in 2024 compared with start of 2023.· Overseas demand for US supplies likely to get boost from competitive prices, closed arbitrage from Asia, tighter-than-usual supply in Europe..· US’ October Group III base oils imports fall for sixth month..· Slowdown points to weak domestic demand and plentiful supply in US market.· Supply could get a further boost with US Group III prices maintaining steep premium to Europe prices..· US’ October base oils exports fall as shipments to Mexico dip to ten-month low..· Shipments to Mexico fall even as stricter restrictions on country’s oil product imports only come into effect from late-Oct 2023.· Fall in shipments in Oct 2023 points to even steeper slowdown in following months.· Drop in shipments complicates US producers’ moves to limit supply-build at year-end even if they boost exports to other markets instead.· Shrinking availability of key outlet for surplus supplies boosts attraction for US refiners to cut output instead..· Mexico’s October lube demand falls for sixth month amid lower consumption of automobile lubricants.· Surplus of US base oil exports to Mexico’s lube consumption falls in Oct 2023 to narrowest level in ten months..· Trend could point to more limited room for additional fall in US exports to Mexico from Oct 2023 levels, to volumes that match Mexico’s requirements for finished lube consumption. .· Latin America’s October lube demand rises for third time in four months..· Region’s rising consumption provides valuable outlet for surplus base oils supplies from US.· Region’s rising consumption and US’ falling domestic demand increases importance for US refiners to keep shut the arbitrage to the region from other sources like Asia-Pacific..· Europe’s base oils demand could revive earlier than usual at start of new year after buyers maintained lower stocks than year-earlier levels.· Signs of more limited surplus supply could curb prospect of any sharp price adjustment that the market often faces at start of new year.· Demand could recover earlier once buyers are comfortable that prices have bottomed out.· Spain’s October lube demand rises for fifth month and at fastest pace in more than two years..· Rising consumption coincides with Europe blenders’ moves to maintain lower base oils inventories to limit their exposure to weak demand, volatile prices and high interest rates.· Rising demand and blenders’ lower stocks raise prospect of their needing to replenish those inventories more frequently.· Such moves could maintain steadier base oils demand in Q4 2023, especially compared with year-earlier levels..· Turkey’s October Group I base oils imports rise for fourth month on pick-up in flows from Italy/Greece.· Rise in imports from Greece/Italy extends trend throughout this year.· Trend boosts sharply Greece/Italy’s share of Turkey’s base oils imports in 2023, contrasts with smaller rise in Russia’s share of Turkey’s imports..· Trend suggests Turkey’s base oils imports from Russia may be close to peaking.· Trend suggests Turkey’s blenders still require large and growing volumes of OEM-approved Group I base oils that they cannot replace with lower-priced substitutes.· Trend suggests Turkey remains a key and growing market for Mediterranean suppliers.· Cfr UAE Group I price discount to Europe/Asia prices widens further, pointing to weaker supply-demand fundamentals in Mideast Gulf market..Global base oils - week of Dec 18: Demand outlook.Asia base oils - week of Dec 18: Demand outlook.Global base oils - week of Dec 18 Price outlook - margins.Global base oils - week of Dec 18: Price outlook - arbitrage
· US base oils demand faces seasonal slowdown at end-2023, start of 2024.· Low feedstock prices and expectations of healthy availability add to preference to hold back.· Buyers’ low stocks could trigger earlier revival in demand in 2024 compared with start of 2023.· Overseas demand for US supplies likely to get boost from competitive prices, closed arbitrage from Asia, tighter-than-usual supply in Europe..· US’ October Group III base oils imports fall for sixth month..· Slowdown points to weak domestic demand and plentiful supply in US market.· Supply could get a further boost with US Group III prices maintaining steep premium to Europe prices..· US’ October base oils exports fall as shipments to Mexico dip to ten-month low..· Shipments to Mexico fall even as stricter restrictions on country’s oil product imports only come into effect from late-Oct 2023.· Fall in shipments in Oct 2023 points to even steeper slowdown in following months.· Drop in shipments complicates US producers’ moves to limit supply-build at year-end even if they boost exports to other markets instead.· Shrinking availability of key outlet for surplus supplies boosts attraction for US refiners to cut output instead..· Mexico’s October lube demand falls for sixth month amid lower consumption of automobile lubricants.· Surplus of US base oil exports to Mexico’s lube consumption falls in Oct 2023 to narrowest level in ten months..· Trend could point to more limited room for additional fall in US exports to Mexico from Oct 2023 levels, to volumes that match Mexico’s requirements for finished lube consumption. .· Latin America’s October lube demand rises for third time in four months..· Region’s rising consumption provides valuable outlet for surplus base oils supplies from US.· Region’s rising consumption and US’ falling domestic demand increases importance for US refiners to keep shut the arbitrage to the region from other sources like Asia-Pacific..· Europe’s base oils demand could revive earlier than usual at start of new year after buyers maintained lower stocks than year-earlier levels.· Signs of more limited surplus supply could curb prospect of any sharp price adjustment that the market often faces at start of new year.· Demand could recover earlier once buyers are comfortable that prices have bottomed out.· Spain’s October lube demand rises for fifth month and at fastest pace in more than two years..· Rising consumption coincides with Europe blenders’ moves to maintain lower base oils inventories to limit their exposure to weak demand, volatile prices and high interest rates.· Rising demand and blenders’ lower stocks raise prospect of their needing to replenish those inventories more frequently.· Such moves could maintain steadier base oils demand in Q4 2023, especially compared with year-earlier levels..· Turkey’s October Group I base oils imports rise for fourth month on pick-up in flows from Italy/Greece.· Rise in imports from Greece/Italy extends trend throughout this year.· Trend boosts sharply Greece/Italy’s share of Turkey’s base oils imports in 2023, contrasts with smaller rise in Russia’s share of Turkey’s imports..· Trend suggests Turkey’s base oils imports from Russia may be close to peaking.· Trend suggests Turkey’s blenders still require large and growing volumes of OEM-approved Group I base oils that they cannot replace with lower-priced substitutes.· Trend suggests Turkey remains a key and growing market for Mediterranean suppliers.· Cfr UAE Group I price discount to Europe/Asia prices widens further, pointing to weaker supply-demand fundamentals in Mideast Gulf market..Global base oils - week of Dec 18: Demand outlook.Asia base oils - week of Dec 18: Demand outlook.Global base oils - week of Dec 18 Price outlook - margins.Global base oils - week of Dec 18: Price outlook - arbitrage