Global base oils demand outlook: Week of 15 April

·        Crude oil prices hold close to highest level in more than five months amid rising geopolitical tensions, tighter-than-expected supply fundamentals.

·        Diesel premium to crude oil holds close to lowest in nine months.

·        Seasonal rise in lube demand in US and Europe contrasts with slowdown in consumption in Asia at start of second quarter of the year.

·        Asia’s base oils demand likely to be more muted as healthy availability of supply curbs urgency to replenish stocks.

·        China’s base oils demand stays cautious, and at levels that free up regular base oils volumes for export.

·        India’s base oils demand could ease as wave of shipments from US, Saudi Arabia and South Korea reach the country.

·        Europe’s regional base oils demand likely to get boost from seasonal pick-up in regional lube consumption.

·        Narrower Europe Group II premium to Group I base oils and prospect of tighter availability of Group I supplies could boost demand for the premium-grade base oils.

·        Overseas demand for European supplies could ease in response to higher prices and signs of more plentiful availability from other markets.

·        US base oils demand could get support from signs of more balanced supply fundamentals.

·        Widening gap between US posted prices and US domestic spot prices suggests that buying interest remains cautious and supply readily available.

·        Those fundamentals give buyers the flexibility to continue to procure smaller volumes and maintain lower stocks.