· Crude oil prices consolidate in narrower range amid uncertainty about extend of global economic weakness and crude oil supply tightness.· China’s slowing economic growth likely to impact other markets, especially in Asia.· Prospect of US interest rates rising further or staying higher for longer set to weigh on US economic growth.· Crude oil supply tightness could be smaller than expected amid signs of rising supplies from other sources.· Diesel prices extend rise versus crude oil to highest since start of 2023 on concern about tight supply heading into winter months.· Lube demand faces seasonal rise in US, Europe and Asia, slowdown in Latin America in coming months.· Blenders’ procurement strategy points to expectations of sufficient base oils supply to meet seasonal pick-up in demand.· Blenders likely to be wary of building much higher stocks in coming weeks as they then prepare to trim inventories before year-end.· Trend adds to attraction of procuring smaller base oils volumes more regularly, and assumption of sufficient supply to meet such procurement plans.· Buyers likely to have access to sufficient supply assuming no unexpected refinery production issues over coming weeks.· US enters peak period of Atlantic hurricane season; one storm forecast to head towards Florida west coast later this week.· Buyers less likely to see swathe of surplus supply as refiners avoid any major supply-build during Q3 2023.· Prospect of firmer demand and sufficient supply likely to support firm base oils prices, curb concern of risk of lower prices.· Weakness of light-grade base oils prices relative to diesel prices could trigger drop in supply and subsequent rise in demand in anticipation of such a development..· Surplus of global base oils supply over demand stays larger than usual in May, highlighting the pressure that refiners face to avoid a supply-build amid slower-than-usual demand..Global base oils - week of Aug 28: Price outlook - arbitrage
· Crude oil prices consolidate in narrower range amid uncertainty about extend of global economic weakness and crude oil supply tightness.· China’s slowing economic growth likely to impact other markets, especially in Asia.· Prospect of US interest rates rising further or staying higher for longer set to weigh on US economic growth.· Crude oil supply tightness could be smaller than expected amid signs of rising supplies from other sources.· Diesel prices extend rise versus crude oil to highest since start of 2023 on concern about tight supply heading into winter months.· Lube demand faces seasonal rise in US, Europe and Asia, slowdown in Latin America in coming months.· Blenders’ procurement strategy points to expectations of sufficient base oils supply to meet seasonal pick-up in demand.· Blenders likely to be wary of building much higher stocks in coming weeks as they then prepare to trim inventories before year-end.· Trend adds to attraction of procuring smaller base oils volumes more regularly, and assumption of sufficient supply to meet such procurement plans.· Buyers likely to have access to sufficient supply assuming no unexpected refinery production issues over coming weeks.· US enters peak period of Atlantic hurricane season; one storm forecast to head towards Florida west coast later this week.· Buyers less likely to see swathe of surplus supply as refiners avoid any major supply-build during Q3 2023.· Prospect of firmer demand and sufficient supply likely to support firm base oils prices, curb concern of risk of lower prices.· Weakness of light-grade base oils prices relative to diesel prices could trigger drop in supply and subsequent rise in demand in anticipation of such a development..· Surplus of global base oils supply over demand stays larger than usual in May, highlighting the pressure that refiners face to avoid a supply-build amid slower-than-usual demand..Global base oils - week of Aug 28: Price outlook - arbitrage