· Global crude oil prices stay under pressure, face more bearish supply-demand fundamentals over the coming months, with geopolitical concerns the key factor providing support.· Gasoil premium to crude oil slips close to lowest in more than a year.· Weaker diesel values and firm base oils values relative to feedstock prices add to incentive for refiners to maximise base oils output even at a time when demand faced a seasonal slowdown.· High base oils margins either point to unusually firm supply-demand fundamentals or to prospect of a supply-build that outpaces demand in the coming months.· Asia’s base oils demand likely to get support from stock-replenishment ahead of seasonal pick-up in demand in late-Q3 2024.· Signs of relatively balanced supply-demand fundamentals, and steadier-than-usual prices for the time of year, remove obstacles that would deter buyers from locking in supplies.· Europe’s base oils demand could stay more muted ahead of seasonal pick-up in requirements after the summer lull.· Weak finished lube demand and signs of healthy availability of supply give blenders the leverage to maintain lower stocks and procure smaller volumes more regularly.· US base oils demand set to remain supported over the coming weeks until the peak hurricane-period has passed, followed by seasonal slowdown from start of Q4 2024.· Latin America’s base oils demand for overseas supplies likely to hold firm for now as fundamentals stay tight.· Latin America’s demand could ease in a few weeks if any US supply-disruptions are relatively limited and if arbitrage shipments supplement regular flows.· Scenario would raise expectations of pick-up in supply and of price adjustments that reflect that improvement.· Those expectations could incentivize buyers to hold off in response..Global base oils margins outlook: Week of 19 Aug.Global base oils arb outlook: Week of 19 Aug.Asia base oils demand outlook: Week of 19 Aug
· Global crude oil prices stay under pressure, face more bearish supply-demand fundamentals over the coming months, with geopolitical concerns the key factor providing support.· Gasoil premium to crude oil slips close to lowest in more than a year.· Weaker diesel values and firm base oils values relative to feedstock prices add to incentive for refiners to maximise base oils output even at a time when demand faced a seasonal slowdown.· High base oils margins either point to unusually firm supply-demand fundamentals or to prospect of a supply-build that outpaces demand in the coming months.· Asia’s base oils demand likely to get support from stock-replenishment ahead of seasonal pick-up in demand in late-Q3 2024.· Signs of relatively balanced supply-demand fundamentals, and steadier-than-usual prices for the time of year, remove obstacles that would deter buyers from locking in supplies.· Europe’s base oils demand could stay more muted ahead of seasonal pick-up in requirements after the summer lull.· Weak finished lube demand and signs of healthy availability of supply give blenders the leverage to maintain lower stocks and procure smaller volumes more regularly.· US base oils demand set to remain supported over the coming weeks until the peak hurricane-period has passed, followed by seasonal slowdown from start of Q4 2024.· Latin America’s base oils demand for overseas supplies likely to hold firm for now as fundamentals stay tight.· Latin America’s demand could ease in a few weeks if any US supply-disruptions are relatively limited and if arbitrage shipments supplement regular flows.· Scenario would raise expectations of pick-up in supply and of price adjustments that reflect that improvement.· Those expectations could incentivize buyers to hold off in response..Global base oils margins outlook: Week of 19 Aug.Global base oils arb outlook: Week of 19 Aug.Asia base oils demand outlook: Week of 19 Aug
