· Crude oil prices stay lower amid concern that higher-for-longer interest rates will compound signs of weakening demand.· Diesel premium to crude oil holds close to lowest in almost a year.· Lower crude oil prices and even weaker diesel prices boost attraction for refiners to increase base oils output to tap the product’s higher margins.· Growing disconnect between firmer base oils prices and weaker crude/diesel prices, and prospect of subsequent rise in supply, raises concern about price-adjustment if supply exceeds demand.· Expectations of healthy supply availability and concern about price adjustment boost incentivize for blenders to maintain low inventories.· Asia’s base oils demand shows signs of weakening as buyers resist higher prices.· Buyers’ resistance to higher prices triggers narrowing spread between FOB Asia prices and prices in destination markets like India and China.· Prospect of improving availability of Group II/III base oils in Europe gives buyers the leverage to maintain lower inventories and to top up stocks as and when required.· Europe’s tighter Group I base oils supplies incentivize buyers to lock in sufficient supplies and simultaneously to seek alternative grades in place of Group I base oils where possible.· Tighter supply and firmer prices for US Group II light-grade base oils fail to trigger significant pick-up in demand.· Trend suggests that demand remains muted, that buyers are comfortable that they can secure sufficient volumes, and that any supply-tightness is likely to be short-lived..Global base oils margins outlook: Week of 13 May.Global base oils arb outlook: Week of 13 May.Asia base oils demand outlook: Week of 13 May
· Crude oil prices stay lower amid concern that higher-for-longer interest rates will compound signs of weakening demand.· Diesel premium to crude oil holds close to lowest in almost a year.· Lower crude oil prices and even weaker diesel prices boost attraction for refiners to increase base oils output to tap the product’s higher margins.· Growing disconnect between firmer base oils prices and weaker crude/diesel prices, and prospect of subsequent rise in supply, raises concern about price-adjustment if supply exceeds demand.· Expectations of healthy supply availability and concern about price adjustment boost incentivize for blenders to maintain low inventories.· Asia’s base oils demand shows signs of weakening as buyers resist higher prices.· Buyers’ resistance to higher prices triggers narrowing spread between FOB Asia prices and prices in destination markets like India and China.· Prospect of improving availability of Group II/III base oils in Europe gives buyers the leverage to maintain lower inventories and to top up stocks as and when required.· Europe’s tighter Group I base oils supplies incentivize buyers to lock in sufficient supplies and simultaneously to seek alternative grades in place of Group I base oils where possible.· Tighter supply and firmer prices for US Group II light-grade base oils fail to trigger significant pick-up in demand.· Trend suggests that demand remains muted, that buyers are comfortable that they can secure sufficient volumes, and that any supply-tightness is likely to be short-lived..Global base oils margins outlook: Week of 13 May.Global base oils arb outlook: Week of 13 May.Asia base oils demand outlook: Week of 13 May