· Crude oil prices likely to get growing support at current, lower levels, amid expectations that some producers will extend supply cuts, countering prospect of weaker demand.· Crude oil prices could get further support from US moves to replenish its emergency stocks.· Diesel premium to crude oil continues to trend lower, even if still well above 1H 2023 levels.· Lower crude/feedstock prices incentivize buyers to hold back until they are comfortable that base oils prices have completed any price-adjustment.· Crude prices need to show signs of steadying or rising before base oils prices complete any adjustments.· Asia’s more balanced supply-demand fundamentals could limit size of any such price adjustment, supporting steadier demand.· China’s base oils demand shows mixed signals.· Its recent drop in flows to Singapore, rise in domestic supply and relatively steady prices could be response to firmer demand.· India’s demand shows signs of holding firm for key base oils grades, falling for very-light grade base oils.· Europe’s base oils demand faces seasonal slowdown over coming weeks.· Region’s supply-demand dynamics show signs of staying relatively balanced, limiting surplus volumes for export market.· Downward pressure on regional demand likely to be more muted than Q4 2022, when lube demand was falling sharply and buyers sought to cut high inventories.· US base oils demand could face sharper slowdown than other regions amid prospect of more plentiful surplus availability and after buyers brought forward their Q4 procurement plans.· US base oils demand could get support from domestic and regional buyers’ more limited alternative supply options as arbitrage shipments to Americas get harder to work.· Brazil’s demand for overseas supplies could ease from early next year, from unusually high levels in recent months.· Any slowdown in demand would follow completion of plant maintenance work during 2H 2023.· Slowdown could add to more muted requirements in Latin America amid easing lube consumption..Global base oils - week of Nov 20: Price outlook - margins
· Crude oil prices likely to get growing support at current, lower levels, amid expectations that some producers will extend supply cuts, countering prospect of weaker demand.· Crude oil prices could get further support from US moves to replenish its emergency stocks.· Diesel premium to crude oil continues to trend lower, even if still well above 1H 2023 levels.· Lower crude/feedstock prices incentivize buyers to hold back until they are comfortable that base oils prices have completed any price-adjustment.· Crude prices need to show signs of steadying or rising before base oils prices complete any adjustments.· Asia’s more balanced supply-demand fundamentals could limit size of any such price adjustment, supporting steadier demand.· China’s base oils demand shows mixed signals.· Its recent drop in flows to Singapore, rise in domestic supply and relatively steady prices could be response to firmer demand.· India’s demand shows signs of holding firm for key base oils grades, falling for very-light grade base oils.· Europe’s base oils demand faces seasonal slowdown over coming weeks.· Region’s supply-demand dynamics show signs of staying relatively balanced, limiting surplus volumes for export market.· Downward pressure on regional demand likely to be more muted than Q4 2022, when lube demand was falling sharply and buyers sought to cut high inventories.· US base oils demand could face sharper slowdown than other regions amid prospect of more plentiful surplus availability and after buyers brought forward their Q4 procurement plans.· US base oils demand could get support from domestic and regional buyers’ more limited alternative supply options as arbitrage shipments to Americas get harder to work.· Brazil’s demand for overseas supplies could ease from early next year, from unusually high levels in recent months.· Any slowdown in demand would follow completion of plant maintenance work during 2H 2023.· Slowdown could add to more muted requirements in Latin America amid easing lube consumption..Global base oils - week of Nov 20: Price outlook - margins
