Global base oils demand outlook: Week of 21 Oct

·        Global crude oil prices reverse some of their recent gains as expectations of weakening supply-demand fundamentals balance out ongoing geopolitical concerns in Middle East.

·        Diesel premium to crude oil holds close to lowest in more than a year.

·        Recent crude price volatility has little impact on demand at a time when consumption faces seasonal slowdown and surplus supply likely to rise.

·        Demand likely to stay muted even if supply-surplus in Q4 2024 is smaller than expected.

·        Asia’s base oils demand could get support from tighter supply because of ongoing plant maintenance work.

·        Demand could get further support from prospect of steadier prices in Asia than in other regions.

·        Arbitrage from US to Asia stays hard to work, curbing alternative supply sources for buyers.

·        China’s demand shows signs of waning for overseas supplies, holding steadier for domestic supplies.

·        Europe’s base oils demand likely to stay muted amid weak finished lube consumption and signs of sufficient availability of all base oils grades.

·        Overseas demand for European supplies could improve if export prices extend recent downward trend.

·        US base oils demand set to slow as buyers work down inventories.

·        Trend boosts importance of pick-up in overseas demand to absorb likely rise in surplus US supplies in coming months.

·        Ongoing fall in US export prices starts to increase feasibility of such a pick-up in demand.

·        Latin America’s base oils demand could fall more than expected if lube consumption extends fall from year-earlier levels, magnifying impact of seasonal slowdown in consumption.