· Americas/Europe base oils demand likely to get support from higher prices, balanced-to-tighter supplies.
· Lube demand turns more mixed in Latin America; demand in Mediterranean region shows signs of extending recovery.
· US gasoline demand rises in early September for twenty-fourth week in twenty five.
· US base oils demand could get temporary boost after US refiners raise posted prices for second month running.
· Narrowing posted-price premium to feedstock and competing fuel prices had raised prospect of such a move.
· Blenders could seek to lock in additional supplies before the new prices come into effect.
· Blenders will face more pressure to raise finished lube prices following second base oils price-rise.
· Any such moves likely to be more difficult in face of softer-than-usual end-user demand.
· US’ July Group III base oils imports fall year-on-year for third month on sustained dip in supplies from Mideast Gulf.
· Trend suggests supplies from Mideast Gulf more sensitive to prices than supplies from Asia.
· Steady recovery in US Group III prices vs Europe prices since late-June 2023 raise prospect of more shipments moving to US.
· US Group III imports from Asia likely dropped in August on slowdown in shipments from South Korea; imports then likely to recover in September.
· Mexico’s lube demand falls in July for third month and to lowest in almost two years.
· Any extension of that trend would curb the country’s demand for base oils supplies used for the production of finished lubricants.
· Such a trend would have less impact on demand for very-light grade base oils unless US export prices rise further.
· Peru continues to take delivery of steady flow of Group II heavy grades and bright stock from Asia, reflecting still-open arbitrage for those shipments.
· US share of Peru’s base oils imports stays lower than usual, reflecting impact of the Asia supplies.
· Rising US prices vs Asia prices could make the arbitrage even more attractive.
· US’ July base oils exports to Brazil rise to one-year high as Latin American country builds stocks ahead of plant shutdowns in Q3-Q4 2023.
· Brazil’s demand for overseas base oils supplies could subsequently slow down once sufficient supplies are secured.
· Portugal’s July lube demand falls for fourth time in five months.
· Slowdown contrasts with firmer demand in Italy, even steeper slowdown in Germany.
· Trend points to ongoing regionwide slowdown in demand combined with more pockets of growth.
· Firmer lube demand in Spain in July adds to those pockets of growth.
· South Africa’s July base oils imports correct lower from unusually high volume in June, still rise from year-earlier levels for seventh month.
· South Africa’s total reliance on base oils imports to cover requirements boosts its attraction as key outlet for supplies from US, Europe and Mideast Gulf.
· Europe’s tighter Group I supplies likely to boost South Africa’s requirements from the other sources.
· Prices for Group I shipments from Europe to Turkey stay competitive in July versus supplies from Russia.
· Trend contrasts with last year, sustains steady demand from Turkey for European supplies, and curbs Turkey’s demand for Russian supplies.
· High but more limited flow of shipments from Russia to Turkey increase pressure on Russia's refiners to move more supplies to other markets.
· Pressure to find additional outlets rises following completion of plant maintenance work in Russia in Q2 2023.
