· US’ domestic base oils demand could stay more muted amid signs of healthy availability, concern prices may adjust further.· US’ domestic spot prices maintain unusually steep premium to export prices.· US posted prices maintain steep premium to domestic spot prices.· Price spreads are usually at narrower levels.· Buyers could hold off until price spreads revert to those narrower levels.· Muted domestic demand increases importance of maintaining firm overseas demand.· Demand from Latin America could slow down amid expected rise in domestic supplies in Brazil, dip in requirements from Argentina, Mexico.· US export prices remain competitive, raising prospect of sustaining its high share of Latin America’s demand..· US’ November base oils exports to Latin America rise for seventh time in eight months..· Rise in shipments reflects competitive US prices, less feasible arbitrage from other regions..· Latin America’s November lube demand growth slows sharply; total consumption falls to ten-month low..· More muted lube demand compounds impact of structural slowdown in Mexico’s base oils demand and likely drop in Brazil’s requirements for overseas base oils supplies.· Slower demand could complicate US refiners’ ability to clear surplus volumes at end-2023/early 2024..· Mexico’s November lube consumption falls for seventh month, but demand for overseas base oils supplies could hold steadier..· Narrower November surplus of US base oils exports over Mexico’s lube demand suggests exports are unlikely to fall much further..· Europe’s domestic base oils demand likely to stay muted until buyers are comfortable that prices have bottomed out.· Europe’s finished lube demand shows signs of staying mixed, with firm consumption in Mediterranean region, weaker consumption in northern Europe. · Europe’s demand for Group II base oils could face pressure in short-term as signs of improving supply contrast with relatively high prices.· Tighter supply in Q4 2023 coincided with and supported a steady rise in Group II prices during that period relative to other grades and regions.· Firm prices keep open the arbitrage to move more supplies from US to Europe.· Buyers could hold back in anticipation of an adjustment in prices to reflect the change in fundamentals..· Europe’s Group III base oils demand could get support from more competitive prices and signs of a smaller supply overhang at start of the year.· Seasonal pick-up in demand likely to gather pace once blenders are comfortable that prices are unlikely to fall..· Base oils demand from Nigeria could rise amid signs of a sharp slowdown in flows to the country during Q4 2023..· A pick-up in demand would coincide with and provide an outlet for a pick-up in surplus supplies in markets like Europe and US.· Shipments to Nigeria would avoid the Suez Canal and Red Sea, adding to their attraction. .Asia base oils - week of Jan 22: Demand outlook.Global base oils - week of Jan 22: Demand outlook.Global base oils - week of Jan 22: Price outlook - margins.Global base oils - week of Jan 22: Price outlook - arbitrage
· US’ domestic base oils demand could stay more muted amid signs of healthy availability, concern prices may adjust further.· US’ domestic spot prices maintain unusually steep premium to export prices.· US posted prices maintain steep premium to domestic spot prices.· Price spreads are usually at narrower levels.· Buyers could hold off until price spreads revert to those narrower levels.· Muted domestic demand increases importance of maintaining firm overseas demand.· Demand from Latin America could slow down amid expected rise in domestic supplies in Brazil, dip in requirements from Argentina, Mexico.· US export prices remain competitive, raising prospect of sustaining its high share of Latin America’s demand..· US’ November base oils exports to Latin America rise for seventh time in eight months..· Rise in shipments reflects competitive US prices, less feasible arbitrage from other regions..· Latin America’s November lube demand growth slows sharply; total consumption falls to ten-month low..· More muted lube demand compounds impact of structural slowdown in Mexico’s base oils demand and likely drop in Brazil’s requirements for overseas base oils supplies.· Slower demand could complicate US refiners’ ability to clear surplus volumes at end-2023/early 2024..· Mexico’s November lube consumption falls for seventh month, but demand for overseas base oils supplies could hold steadier..· Narrower November surplus of US base oils exports over Mexico’s lube demand suggests exports are unlikely to fall much further..· Europe’s domestic base oils demand likely to stay muted until buyers are comfortable that prices have bottomed out.· Europe’s finished lube demand shows signs of staying mixed, with firm consumption in Mediterranean region, weaker consumption in northern Europe. · Europe’s demand for Group II base oils could face pressure in short-term as signs of improving supply contrast with relatively high prices.· Tighter supply in Q4 2023 coincided with and supported a steady rise in Group II prices during that period relative to other grades and regions.· Firm prices keep open the arbitrage to move more supplies from US to Europe.· Buyers could hold back in anticipation of an adjustment in prices to reflect the change in fundamentals..· Europe’s Group III base oils demand could get support from more competitive prices and signs of a smaller supply overhang at start of the year.· Seasonal pick-up in demand likely to gather pace once blenders are comfortable that prices are unlikely to fall..· Base oils demand from Nigeria could rise amid signs of a sharp slowdown in flows to the country during Q4 2023..· A pick-up in demand would coincide with and provide an outlet for a pick-up in surplus supplies in markets like Europe and US.· Shipments to Nigeria would avoid the Suez Canal and Red Sea, adding to their attraction. .Asia base oils - week of Jan 22: Demand outlook.Global base oils - week of Jan 22: Demand outlook.Global base oils - week of Jan 22: Price outlook - margins.Global base oils - week of Jan 22: Price outlook - arbitrage
