· Crude oil prices rise to highest in more than three months on expectations that crude oil supply will increasingly lag demand.· Diesel premium to crude oil extends rise to highest since January – well below highs of 2022, well above typical levels before 2022.· Diesel premium to crude rises amid signs of still-lower-than-usual stocks even amid global economic slowdown.· US Fed raises interest rates as expected; even if interest rates have peaked, they are likely to remain at least at current levels well into next year.· US currency strengthens vs euro amid expectations further rise in interest rates in US more likely than in Europe, whose economic growth remains anaemic.· Stronger US currency typically puts downward pressure on crude oil prices.· China’s slower-than-expected economic recovery and weakening services sector raises expectations of stronger stimulus measures.· Global lube demand faces seasonal slowdown in third quarter of the year.· Slowdown in lube demand shows signs of being shallower than expected.· Market faces seasonal pick-up in lube demand from end-Q3 2023, combined with blenders’ moves to replenish depleted stocks.· Blenders comfortable that supply will be sufficient to cover requirements to replenish stocks and meet rise in lube demand.· Blenders may face lower-than-usual supply-surplus in late Q3 2023, unlike same time last year.· Supply could be lower than expected as ongoing arbitrage flows from US in Q3 2023 limit any supply-build.· Supply could be lower than expected amid lower-than-expected base oils output in southeast Asia, snug Group I availability in Europe.· Supply could stay lower as squeezed margins put growing pressure on refiners to cut or maintain lower output.· Base oils demand could get support in coming weeks if blenders deem that supply is tighter than expected.· Base oils demand could get support if blenders bring forward procurement plans in anticipation of higher prices..Global base oils - week of July 31: Price outlook - margins
· Crude oil prices rise to highest in more than three months on expectations that crude oil supply will increasingly lag demand.· Diesel premium to crude oil extends rise to highest since January – well below highs of 2022, well above typical levels before 2022.· Diesel premium to crude rises amid signs of still-lower-than-usual stocks even amid global economic slowdown.· US Fed raises interest rates as expected; even if interest rates have peaked, they are likely to remain at least at current levels well into next year.· US currency strengthens vs euro amid expectations further rise in interest rates in US more likely than in Europe, whose economic growth remains anaemic.· Stronger US currency typically puts downward pressure on crude oil prices.· China’s slower-than-expected economic recovery and weakening services sector raises expectations of stronger stimulus measures.· Global lube demand faces seasonal slowdown in third quarter of the year.· Slowdown in lube demand shows signs of being shallower than expected.· Market faces seasonal pick-up in lube demand from end-Q3 2023, combined with blenders’ moves to replenish depleted stocks.· Blenders comfortable that supply will be sufficient to cover requirements to replenish stocks and meet rise in lube demand.· Blenders may face lower-than-usual supply-surplus in late Q3 2023, unlike same time last year.· Supply could be lower than expected as ongoing arbitrage flows from US in Q3 2023 limit any supply-build.· Supply could be lower than expected amid lower-than-expected base oils output in southeast Asia, snug Group I availability in Europe.· Supply could stay lower as squeezed margins put growing pressure on refiners to cut or maintain lower output.· Base oils demand could get support in coming weeks if blenders deem that supply is tighter than expected.· Base oils demand could get support if blenders bring forward procurement plans in anticipation of higher prices..Global base oils - week of July 31: Price outlook - margins
