· Americas base oils demand could ease in coming weeks amid seasonal slowdown in demand in US and Latin America..· US four-week average gasoline demand falls at end-September for first time in more than a month, and at fastest pace since end-2022..· US domestic base oils demand likely to slow in coming weeks as prospect of steady-to-lower prices adds to seasonal slowdown in consumption. · US’ July base oils/lube demand rises for second time in three months on firmer domestic consumption, high exports.· Trend highlights importance of higher-than-usual exports to cushion impact of slower domestic demand this year..· Trend highlights importance of base oils prices that sustain higher-than-usual exports and that deter arbitrage shipments from other markets.· US’ domestic demand holds in narrower range in three months to July, contrasting with more volatile swings in demand in preceding months.· Trend could point to stabilization of domestic demand, even if at lower levels.· US base oils exports show signs of recovering in September, after sharp slowdown in August, amid pick-up in flows to Europe and Latin America.· Overseas demand will need to hold firm to balance out likely slowdown in domestic US demand over coming months.· Mexico’s demand for US supplies of very-light grade base oils could slow after rebound in US base oils prices versus heating oil since late-Sep 2023..· Brazil’s August base oils imports rise to ten-month high, adding to surge in shipments to the country ahead of scheduled plant maintenance work..· Rise in Brazil's demand for overseas supplies provides US refiners with valuable outlet during Q3 2023, curbing supply-build in their market.· Rise in demand for overseas supplies likely to ease in Q4 2023 following build-up of stocks to cover for domestic plant maintenance work.· A reversion of base oil imports to more typical levels would leave US refiners facing prospect of moving more supplies to other overseas outlets to limit any year-end supply-build. .· Europe’s base oils demand likely to stay muted amid expectations of sufficient supply.· Sufficient supply would give blenders leverage to maintain lower stocks as end-user demand starts to face seasonal slowdown.· Rising base oils margins likely to dampen upward base oils price-pressure, adding to lack of urgency for blenders to secure more supplies.· Germany’s July lube demand falls for twenty-fifth straight month.· Sustained drop in demand highlights disparity in demand between different regions in Europe.· Drop in demand highlights weakness of domestic consumption of certain lubricants like hydraulic oils and metalworking fluids.· Weaker demand contrasts with surging exports of hydraulic oils and smaller slowdown in exports of metalworking fluids..· Trend points to firmer industrial oils demand in other markets compared with Germany..· Germany’s lube production falls more steeply than lube imports in July and in first seven months of 2023..· Trend points to lower domestic demand for base oils feedstock supplies, and more muted drop in demand for feedstock supplies from blenders moving lube supplies to Germany.· Trend points to more caution among domestic blenders than among blenders exporting lubricants to Germany..· Europe’s July base oils exports to non-EU markets fall for fourth time in five months..· Trend reflects Europe’s limited Group I supply surplus, incentivizes overseas buyers to line up alternative supply sources or to use more premium-grade base oils.· Extended slowdown in Europe’s base oils exports raises prospect of overseas buyers lining up more permanent alternative supply sources.· That trend shows signs of materializing amid pick-up in flows from less regular sources like Turkey and Algeria..· Premium-grade base oils exports from Spain rebound in September, countering signs of lower volumes from Mideast Gulf to Europe..· Europe’s Group III base oils prices for supplies with limited or no approvals face more pressure than prices for supplies with approvals, ICIS data shows.· Trend points to firmer demand for supplies with approvals, even as supplies from Spain rise strongly..· Asia’s August base oils exports to Mideast Gulf stay unusually high amid growing number of increasingly regular sources such as Thailand, Taiwan and China..· Surge in exports from Asia to Mideast Gulf coincides with steady flows from Europe – mostly because of arbitrage supplies earlier in the year.· Trend triggers sustained rise in global exports to Mideast Gulf this year..· Trend shows signs of extending at least through Q4 2023..Global base oils - week of Oct 9: Price outlook - margins
· Americas base oils demand could ease in coming weeks amid seasonal slowdown in demand in US and Latin America..· US four-week average gasoline demand falls at end-September for first time in more than a month, and at fastest pace since end-2022..· US domestic base oils demand likely to slow in coming weeks as prospect of steady-to-lower prices adds to seasonal slowdown in consumption. · US’ July base oils/lube demand rises for second time in three months on firmer domestic consumption, high exports.· Trend highlights importance of higher-than-usual exports to cushion impact of slower domestic demand this year..· Trend highlights importance of base oils prices that sustain higher-than-usual exports and that deter arbitrage shipments from other markets.· US’ domestic demand holds in narrower range in three months to July, contrasting with more volatile swings in demand in preceding months.· Trend could point to stabilization of domestic demand, even if at lower levels.· US base oils exports show signs of recovering in September, after sharp slowdown in August, amid pick-up in flows to Europe and Latin America.· Overseas demand will need to hold firm to balance out likely slowdown in domestic US demand over coming months.· Mexico’s demand for US supplies of very-light grade base oils could slow after rebound in US base oils prices versus heating oil since late-Sep 2023..· Brazil’s August base oils imports rise to ten-month high, adding to surge in shipments to the country ahead of scheduled plant maintenance work..· Rise in Brazil's demand for overseas supplies provides US refiners with valuable outlet during Q3 2023, curbing supply-build in their market.· Rise in demand for overseas supplies likely to ease in Q4 2023 following build-up of stocks to cover for domestic plant maintenance work.· A reversion of base oil imports to more typical levels would leave US refiners facing prospect of moving more supplies to other overseas outlets to limit any year-end supply-build. .· Europe’s base oils demand likely to stay muted amid expectations of sufficient supply.· Sufficient supply would give blenders leverage to maintain lower stocks as end-user demand starts to face seasonal slowdown.· Rising base oils margins likely to dampen upward base oils price-pressure, adding to lack of urgency for blenders to secure more supplies.· Germany’s July lube demand falls for twenty-fifth straight month.· Sustained drop in demand highlights disparity in demand between different regions in Europe.· Drop in demand highlights weakness of domestic consumption of certain lubricants like hydraulic oils and metalworking fluids.· Weaker demand contrasts with surging exports of hydraulic oils and smaller slowdown in exports of metalworking fluids..· Trend points to firmer industrial oils demand in other markets compared with Germany..· Germany’s lube production falls more steeply than lube imports in July and in first seven months of 2023..· Trend points to lower domestic demand for base oils feedstock supplies, and more muted drop in demand for feedstock supplies from blenders moving lube supplies to Germany.· Trend points to more caution among domestic blenders than among blenders exporting lubricants to Germany..· Europe’s July base oils exports to non-EU markets fall for fourth time in five months..· Trend reflects Europe’s limited Group I supply surplus, incentivizes overseas buyers to line up alternative supply sources or to use more premium-grade base oils.· Extended slowdown in Europe’s base oils exports raises prospect of overseas buyers lining up more permanent alternative supply sources.· That trend shows signs of materializing amid pick-up in flows from less regular sources like Turkey and Algeria..· Premium-grade base oils exports from Spain rebound in September, countering signs of lower volumes from Mideast Gulf to Europe..· Europe’s Group III base oils prices for supplies with limited or no approvals face more pressure than prices for supplies with approvals, ICIS data shows.· Trend points to firmer demand for supplies with approvals, even as supplies from Spain rise strongly..· Asia’s August base oils exports to Mideast Gulf stay unusually high amid growing number of increasingly regular sources such as Thailand, Taiwan and China..· Surge in exports from Asia to Mideast Gulf coincides with steady flows from Europe – mostly because of arbitrage supplies earlier in the year.· Trend triggers sustained rise in global exports to Mideast Gulf this year..· Trend shows signs of extending at least through Q4 2023..Global base oils - week of Oct 9: Price outlook - margins