· Crude oil prices rebound from recent lows amid expectations of earlier fall in interest rates in 2024 and prospect of weaker US dollar versus other currencies.· Diesel premium to crude extends gradual fall to five-month low.· Global base oils demand faces seasonal slowdown, wariness about price-correction amid firm margins, lower feedstock prices.· Blenders’ strategy of maintaining low stocks is likely to trigger more frequent moves to replenish inventories in markets where underlying lube demand remains firm, such as Latin America and Asia.· China’s base oils demand shows signs of getting support more from stock-replenishment than from any strong pick-up in lube consumption.· India’s base oils demand likely to hold steady even as buyers target lower prices in anticipation of healthy availability.· Europe’s high base oils values vs feedstock prices and vs other regions point either to firm supply-demand fundamentals or to mismatch that could trigger growing supply-build.· Seasonal slowdown in US base oils demand gives buyers time to hold back and limit their exposure to repercussions of any supply-build over the coming weeks.· US domestic demand could face more downward pressure as wide posted-price premium to spot prices adds to incentivize for buyers to hold back.· Buyers’ lower stocks, and any signs of more muted supply-build, could trigger earlier pick-up in demand.· Americas base oils demand could get support from competitive US export prices, steady underlying lube demand in Latin America.· Latin America’s firm lube demand likely to be insufficient to counter slowdown in Mexico’s base oils consumption..· Lube demand in key global markets rises in Sept 2023 year on year and from Aug 2023.· Firmer demand contrasts with drop in base oils supply in Sept 2023..· Diverging supply-demand trends help to leave global market more balanced at start of Q4 2023..Global base oils - week of Dec 18 Price outlook - margins
· Crude oil prices rebound from recent lows amid expectations of earlier fall in interest rates in 2024 and prospect of weaker US dollar versus other currencies.· Diesel premium to crude extends gradual fall to five-month low.· Global base oils demand faces seasonal slowdown, wariness about price-correction amid firm margins, lower feedstock prices.· Blenders’ strategy of maintaining low stocks is likely to trigger more frequent moves to replenish inventories in markets where underlying lube demand remains firm, such as Latin America and Asia.· China’s base oils demand shows signs of getting support more from stock-replenishment than from any strong pick-up in lube consumption.· India’s base oils demand likely to hold steady even as buyers target lower prices in anticipation of healthy availability.· Europe’s high base oils values vs feedstock prices and vs other regions point either to firm supply-demand fundamentals or to mismatch that could trigger growing supply-build.· Seasonal slowdown in US base oils demand gives buyers time to hold back and limit their exposure to repercussions of any supply-build over the coming weeks.· US domestic demand could face more downward pressure as wide posted-price premium to spot prices adds to incentivize for buyers to hold back.· Buyers’ lower stocks, and any signs of more muted supply-build, could trigger earlier pick-up in demand.· Americas base oils demand could get support from competitive US export prices, steady underlying lube demand in Latin America.· Latin America’s firm lube demand likely to be insufficient to counter slowdown in Mexico’s base oils consumption..· Lube demand in key global markets rises in Sept 2023 year on year and from Aug 2023.· Firmer demand contrasts with drop in base oils supply in Sept 2023..· Diverging supply-demand trends help to leave global market more balanced at start of Q4 2023..Global base oils - week of Dec 18 Price outlook - margins
