· Crude oil prices hold in narrow, lower range compared with April 2024 on concern higher-for-longer interest rates will curb economic growth.· Diesel premium to crude oil stays close to lowest in a year amid signs of healthy supply, weaker demand.· Weak diesel premium to crude contrasts with rising base oils premium to crude and diesel.· Trend adds to attraction for refiners to maximise base oils output.· Growing divergence of diesel and base oils prices, and prospect of rise in base oils output, incentivizes buyers to maintain lower stocks and procure smaller volumes more regularly.· Base oils demand in Asia shows signs of slowing in growing number of markets as prices in destination outlets increasingly lag FOB Asia cargo prices.· Trend could prompt Asia’s refiners to look to buyers in more distant markets like Latin America.· Tighter-than-expected Group I supply in Europe, and prospect of more frequent repeat of such a scenario, could incentivize regional buyers to increase their use of premium-grade base oils instead.· Mixed signals about finished lube demand in Europe add to attraction for blenders to continue to hold lower stocks.· US base oils prices extend rise versus feedstock/competing fuel prices and versus prices in other regions like Europe and Asia.· Trend raises prospect of rise in total supply and rise in supply that stays in US’ domestic market.· Trend increases importance of strong pick-up in domestic demand to absorb likely rise in supply.· A lack of any such strong pick-up in demand would increase prospect of faster build-up of surplus supplies.· US’ domestic demand could get support from signs of more balanced supply in short-term, and stock-building ahead of Atlantic hurricane season.· US buyers could limit size of any stock-building amid expectations that supply will remain sufficient to cover requirements..Global base oils margins outlook: Week of 27 May.Global base oils arb outlook: Week of 27 May.Asia base oils demand outlook: Week of 27 May.Asia base oils supply outlook: Week of 27 May
· Crude oil prices hold in narrow, lower range compared with April 2024 on concern higher-for-longer interest rates will curb economic growth.· Diesel premium to crude oil stays close to lowest in a year amid signs of healthy supply, weaker demand.· Weak diesel premium to crude contrasts with rising base oils premium to crude and diesel.· Trend adds to attraction for refiners to maximise base oils output.· Growing divergence of diesel and base oils prices, and prospect of rise in base oils output, incentivizes buyers to maintain lower stocks and procure smaller volumes more regularly.· Base oils demand in Asia shows signs of slowing in growing number of markets as prices in destination outlets increasingly lag FOB Asia cargo prices.· Trend could prompt Asia’s refiners to look to buyers in more distant markets like Latin America.· Tighter-than-expected Group I supply in Europe, and prospect of more frequent repeat of such a scenario, could incentivize regional buyers to increase their use of premium-grade base oils instead.· Mixed signals about finished lube demand in Europe add to attraction for blenders to continue to hold lower stocks.· US base oils prices extend rise versus feedstock/competing fuel prices and versus prices in other regions like Europe and Asia.· Trend raises prospect of rise in total supply and rise in supply that stays in US’ domestic market.· Trend increases importance of strong pick-up in domestic demand to absorb likely rise in supply.· A lack of any such strong pick-up in demand would increase prospect of faster build-up of surplus supplies.· US’ domestic demand could get support from signs of more balanced supply in short-term, and stock-building ahead of Atlantic hurricane season.· US buyers could limit size of any stock-building amid expectations that supply will remain sufficient to cover requirements..Global base oils margins outlook: Week of 27 May.Global base oils arb outlook: Week of 27 May.Asia base oils demand outlook: Week of 27 May.Asia base oils supply outlook: Week of 27 May
