· Crude oil prices hold well above Nov 2023-March 2024 levels, down from recent highs in April 2024 as prospect of interest rates staying higher for longer counters concern about tighter supply.· Diesel premium to crude oil extends fall to lowest in almost a year.· Unusually high diesel cracks in recent years had been a factor supporting base oils prices that faced pressure to keep pace or see refiners redirect more feedstock to diesel production.· Lower diesel cracks raise prospect of reversing that trend.· Prospect of sufficient base oils supply gives buyers the leverage to maintain lower inventories, curbing size of boost from seasonal rise in demand in markets like US and Europe.· Asia’s base oils demand could turn more cautious as firm FOB Asia base oils prices outpace domestic/CFR prices in China and India, pointing to disconnect between supply and demand expectations.· Europe’s demand for premium-grade base oils could get support from signs of more plentiful supply and competitive prices vs Group I base oils.· Lack of major response in US domestic spot prices to recent rise in refiners’ posted prices points to signs that posted-price adjustments have less impact on immediate demand than they did previously.· Lack of major response in domestic spot prices suggests that buyers are confident that supply remains sufficient to prevent a significant change in spot prices.· Trend incentivizes buyers to maintain procurement strategy of buying smaller volumes on a more regular basis.· Overseas demand for US supplies could get support from prices that remain competitive even after their recent rise..Global base oils margins outlook: Week of 29 April.Global base oils arb outlook: Week of 29 April.Asia base oils demand outlook: Week of 29 April.Asia base oils supply outlook: Week of 29 April
