· Crude oil prices likely to hold firm as tight supply, geopolitical tensions counter impact of slowdown in demand.· Diesel premium to crude stays rangebound below Q3 2023 highs, still well above typical levels.· IEA raises 2023 oil demand growth forecast, cuts 2024 growth forecast amid slower economic growth.· US interest rates seen staying high well into next year as inflation stays higher than expected..· Prospect of seasonal slowdown in global base oils demand in coming months could have smaller price impact than usual following signs of smaller-than-usual supply build in Q3 2023.· Global base oils supply recovers in July but stays lower than usual..· Global lube demand shows signs of falling in July, but less than usual, curbing supply-build at start of Q3 2023.· Supply would need to extend that trend and stay lower than usual in Q4 2023 to limit supply-build and any downward pressure on prices.· Limited plant maintenance work in Q4 2023 means refiners would need to rely on other means to curb supply.· Lack of any such moves to curb supply would increase likelihood of supply outpacing demand in coming months.· Improvement in base oils margins in recent weeks curbs pressure on refiners to lower supply.· Either way, prospect of sufficient supplies over coming months gives blenders the flexibility to maintain low stocks and procure smaller volumes more regularly.· Such a strategy would also allow them to benefit from any price-pressure from any build-up of surplus supplies over the coming weeks..Global base oils - week of Oct 16: Price outlook - margins
· Crude oil prices likely to hold firm as tight supply, geopolitical tensions counter impact of slowdown in demand.· Diesel premium to crude stays rangebound below Q3 2023 highs, still well above typical levels.· IEA raises 2023 oil demand growth forecast, cuts 2024 growth forecast amid slower economic growth.· US interest rates seen staying high well into next year as inflation stays higher than expected..· Prospect of seasonal slowdown in global base oils demand in coming months could have smaller price impact than usual following signs of smaller-than-usual supply build in Q3 2023.· Global base oils supply recovers in July but stays lower than usual..· Global lube demand shows signs of falling in July, but less than usual, curbing supply-build at start of Q3 2023.· Supply would need to extend that trend and stay lower than usual in Q4 2023 to limit supply-build and any downward pressure on prices.· Limited plant maintenance work in Q4 2023 means refiners would need to rely on other means to curb supply.· Lack of any such moves to curb supply would increase likelihood of supply outpacing demand in coming months.· Improvement in base oils margins in recent weeks curbs pressure on refiners to lower supply.· Either way, prospect of sufficient supplies over coming months gives blenders the flexibility to maintain low stocks and procure smaller volumes more regularly.· Such a strategy would also allow them to benefit from any price-pressure from any build-up of surplus supplies over the coming weeks..Global base oils - week of Oct 16: Price outlook - margins