· US base oils demand could stay more muted as sufficient supplies give domestic buyers the leverage to maintain low stocks.· Widening discount of US domestic spot prices to posted prices highlights the lack of any reaction to the recent round of posted-price adjustments.· Signs of some downward spot price-pressure could add to buyers’ preference to procure small volumes more frequently to limit exposure to any drop in prices.· US export prices remain at steeper-than-usual discounts to prices in markets like Europe and India even after recent price recovery.· Still-competitive export prices could support demand from overseas markets.· Any extension of recent slowdown in domestic demand in Latin America would add to pressure on US refiners to find more distant alternative outlets for their supplies..· Latin America’s lube demand likely to rise in Q2 2024 and Q3 2024 from Q1 2024..· Size of increase in demand shows signs of lagging earlier expectations.· Smaller rise in demand and prospect of rise in regional base oils supply would curb the region's requirements for additional volumes from the US compared with year-earlier levels.· Such a trend would put more pressure on US refiners to cut output or to line up more arbitrage shipments to other regions..· Brazil’s March lube demand falls for first time in three months and at steepest pace in eighteen months..· Drop in demand erodes key support for consumption in Latin America, where demand in Argentina and Mexico already faced a sustained contraction.· Drop in demand raises prospect of curbing further Brazil’s requirements for base oils supplies from US at a time when domestic production has recovered.· Uncertainty about country's demand prospects could add to slowdown in base oils requirements as blenders move to limit inventory-build..· Brazil’s weaker consumption gets no support from Argentina, whose March lube demand extends fall for eighth time in nine months..· Argentina’s lube production falls even faster in March 2024 amid signs that blenders seek to work down and so minimize stocks, cutting their exposure to sliding demand.· Falling lube demand and output, and prospect of extension of the trend, cut Argentina’s base oils requirements.· Volatility of base oils and lube demand complicates possibility of arbitrage shipments from more distant markets like Asia, boosts attraction of supplies from logistically-closer markets like US..· Europe’s demand for premium-grade base oils could get a boost from signs of more plentiful availability and competitive prices vs Group I base oils.· Europe’s firm Group I export prices point to stronger demand from overseas markets than from regional markets, especially for brightstock.· Italy’s March lube demand falls for first time in ten months on sharp dip in automobile and industrial oil consumption..· Slowdown puts onus on other markets to sustain steady-to-firmer lube consumption in regional market.· Any extension of slowdown in Italy into Q2 2024 would point to more structural rather than temporary factors impacting demand.· Either way, size of slowdown in demand incentivizes blenders to maintain low stocks..· France’s February lube demand rises for first time in twenty-one months..· France, along with Germany, was one of the key economies whose lube consumption extended its fall throughout 2023.· Firmer lube demand in France, if sustained, would help to balance out recent slowdown in Italy’s lube demand and support steadier consumption throughout Europe.· Falling lube consumption in markets like France had been a factor that incentivized blenders to maintain low stocks.· Signs of steadier-to-firmer lube consumption would increase the need for blenders to boost the size of their low inventories or at least replenish them more frequently..· Nigeria’s base oils demand could rise amid signs of a slowdown in shipments to the country in April 2024.· Any slowdown would follow steady flows to the West African country in Feb 2024..· Global exports to Nigeria hold steady in Feb 2024 as jump in shipments from US cushions signs of slowdown in flows from the Baltic region..Global base oils margins outlook: Week of 29 April.Global base oils arb outlook: Week of 29 April.Global base oils demand outlook: Week of 29 April.Asia base oils demand outlook: Week of 29 April
· US base oils demand could stay more muted as sufficient supplies give domestic buyers the leverage to maintain low stocks.· Widening discount of US domestic spot prices to posted prices highlights the lack of any reaction to the recent round of posted-price adjustments.· Signs of some downward spot price-pressure could add to buyers’ preference to procure small volumes more frequently to limit exposure to any drop in prices.· US export prices remain at steeper-than-usual discounts to prices in markets like Europe and India even after recent price recovery.· Still-competitive export prices could support demand from overseas markets.· Any extension of recent slowdown in domestic demand in Latin America would add to pressure on US refiners to find more distant alternative outlets for their supplies..· Latin America’s lube demand likely to rise in Q2 2024 and Q3 2024 from Q1 2024..· Size of increase in demand shows signs of lagging earlier expectations.· Smaller rise in demand and prospect of rise in regional base oils supply would curb the region's requirements for additional volumes from the US compared with year-earlier levels.· Such a trend would put more pressure on US refiners to cut output or to line up more arbitrage shipments to other regions..· Brazil’s March lube demand falls for first time in three months and at steepest pace in eighteen months..· Drop in demand erodes key support for consumption in Latin America, where demand in Argentina and Mexico already faced a sustained contraction.· Drop in demand raises prospect of curbing further Brazil’s requirements for base oils supplies from US at a time when domestic production has recovered.· Uncertainty about country's demand prospects could add to slowdown in base oils requirements as blenders move to limit inventory-build..· Brazil’s weaker consumption gets no support from Argentina, whose March lube demand extends fall for eighth time in nine months..· Argentina’s lube production falls even faster in March 2024 amid signs that blenders seek to work down and so minimize stocks, cutting their exposure to sliding demand.· Falling lube demand and output, and prospect of extension of the trend, cut Argentina’s base oils requirements.· Volatility of base oils and lube demand complicates possibility of arbitrage shipments from more distant markets like Asia, boosts attraction of supplies from logistically-closer markets like US..· Europe’s demand for premium-grade base oils could get a boost from signs of more plentiful availability and competitive prices vs Group I base oils.· Europe’s firm Group I export prices point to stronger demand from overseas markets than from regional markets, especially for brightstock.· Italy’s March lube demand falls for first time in ten months on sharp dip in automobile and industrial oil consumption..· Slowdown puts onus on other markets to sustain steady-to-firmer lube consumption in regional market.· Any extension of slowdown in Italy into Q2 2024 would point to more structural rather than temporary factors impacting demand.· Either way, size of slowdown in demand incentivizes blenders to maintain low stocks..· France’s February lube demand rises for first time in twenty-one months..· France, along with Germany, was one of the key economies whose lube consumption extended its fall throughout 2023.· Firmer lube demand in France, if sustained, would help to balance out recent slowdown in Italy’s lube demand and support steadier consumption throughout Europe.· Falling lube consumption in markets like France had been a factor that incentivized blenders to maintain low stocks.· Signs of steadier-to-firmer lube consumption would increase the need for blenders to boost the size of their low inventories or at least replenish them more frequently..· Nigeria’s base oils demand could rise amid signs of a slowdown in shipments to the country in April 2024.· Any slowdown would follow steady flows to the West African country in Feb 2024..· Global exports to Nigeria hold steady in Feb 2024 as jump in shipments from US cushions signs of slowdown in flows from the Baltic region..Global base oils margins outlook: Week of 29 April.Global base oils arb outlook: Week of 29 April.Global base oils demand outlook: Week of 29 April.Asia base oils demand outlook: Week of 29 April
