· Crude oil prices rise to highest since early Nov 2023 amid growing concern about supply disruptions in Mideast Gulf.· Diesel premium to crude oil climbs to highest since Q3 2023 as concern rises about disruption to Europe's diesel supply.· Rising crude and diesel prices coincide with prospect of seasonal rise in lube consumption later in Q1 2024.· Firmer lube fundamentals and higher crude/diesel prices likely to support firmer base oils demand and ease concern about further drop in base oils prices.· Asia base oils demand likely to get support from seasonal rise in lube demand.· Asia’s base oils demand could get a further boost from signs of tighter-than-expected regional supply and steady-to-firm prices.· China’s base oils demand could ease over coming weeks as activity slows during lunar new year holidays.· Extent of pick-up in China’s domestic demand after lunar new year holidays depends on strength of seasonal rise in lube consumption in late Q1 2024.· India’s base oils demand could rise as rebounding diesel prices raise prospect of higher price offers for very-light grade base oils.· Prospect of disruptions or delays to cargoes from Mideast Gulf/Europe to India could boost demand for supplies from Asia.· Europe’s base oils demand likely to rise more strongly in coming weeks than it did this time last year, reflecting blenders’ lower inventories compared with early 2023.· Demand likely to revive once buyers are comfortable that the recent price correction is over.· Sliding base oils values versus feedstock/diesel prices could support such expectations.· Demand in Africa and Mideast Gulf could get support from moves to replenish stocks after slowdown in shipments to those markets in Q4 2023.· US base oils demand could improve amid expectations that prices face less downward pressure.· Any narrowing of the gap between US domestic and export prices, or domestic spot and posted prices, could add to expectations of steadier-to-firm prices and curb buyers’ incentive to hold back.· Base oils demand in Latin America could face pressure from signs of weaker lube demand growth in the region.· Demand could hold steady-to-firm for US supplies amid competitive prices and tighter supply in other regions..Global base oils - week of Jan 29: Price outlook - margins.Global base oils - week of Jan 29: Price outlook - arbitrage
