· Global crude oil prices stay low even as they rebound over past week as geopolitical factors provide short-term support.· Prices continue to face underlying pressure over the medium term from prospect of rising supply and weak demand.· Diesel premium to crude oil stays close to lowest in more than a year, reflecting those weak supply-demand fundamentals.· Weak diesel prices contrast with unusually firm base oils prices.· Contrasting dynamic between diesel and base oils prices is feasible if base oils supply-demand fundamentals stay strong.· Base oils market faces prospect of seasonal slowdown in demand and rise in supply in Q4 2024.· That dynamic, combined, with high base oils margins, could speed up slowdown in demand as buyers seek to avoid exposure to any major price adjustment.· Asia’s base oils demand could be more muted amid signs that buyers have secured sufficient volumes for now to cover seasonal rise in consumption in markets like India and China.· China’s Group I price-strength in recent weeks could reflect pick-up in demand to cover for drop in country’s supply following planned closure of Group I unit in Oct 2024.· Europe’s base oils demand could get support from blenders’ low inventories that require more frequent moves to replenish stocks.· Underlying lube demand weakness likely to curb any moves to procure additional volumes.· US base oils demand could face pressure from weak lube consumption, seasonal slowdown in demand in Q4 2024.· Demand could face further pressure from moves to trim inventories amid easing concern about weather-related supply disruptions, even with the prospect of another storm forming and heading towards the US Gulf coast over the coming week.· Latin America’s base oils demand could ease as buyers anticipate improvement in supply from US, and prices that reflect that improvement in supply..Global base oils margins outlook: Week of 23 Sept.Global base oils arb outlook: Week of 23 Sept.Asia base oils demand outlook: Week of 23 Sept
· Global crude oil prices stay low even as they rebound over past week as geopolitical factors provide short-term support.· Prices continue to face underlying pressure over the medium term from prospect of rising supply and weak demand.· Diesel premium to crude oil stays close to lowest in more than a year, reflecting those weak supply-demand fundamentals.· Weak diesel prices contrast with unusually firm base oils prices.· Contrasting dynamic between diesel and base oils prices is feasible if base oils supply-demand fundamentals stay strong.· Base oils market faces prospect of seasonal slowdown in demand and rise in supply in Q4 2024.· That dynamic, combined, with high base oils margins, could speed up slowdown in demand as buyers seek to avoid exposure to any major price adjustment.· Asia’s base oils demand could be more muted amid signs that buyers have secured sufficient volumes for now to cover seasonal rise in consumption in markets like India and China.· China’s Group I price-strength in recent weeks could reflect pick-up in demand to cover for drop in country’s supply following planned closure of Group I unit in Oct 2024.· Europe’s base oils demand could get support from blenders’ low inventories that require more frequent moves to replenish stocks.· Underlying lube demand weakness likely to curb any moves to procure additional volumes.· US base oils demand could face pressure from weak lube consumption, seasonal slowdown in demand in Q4 2024.· Demand could face further pressure from moves to trim inventories amid easing concern about weather-related supply disruptions, even with the prospect of another storm forming and heading towards the US Gulf coast over the coming week.· Latin America’s base oils demand could ease as buyers anticipate improvement in supply from US, and prices that reflect that improvement in supply..Global base oils margins outlook: Week of 23 Sept.Global base oils arb outlook: Week of 23 Sept.Asia base oils demand outlook: Week of 23 Sept
