· Crude oil prices extend fall amid concern supply could exceed demand in Q1 2024.· Gasoil premium to crude oil extends gradual fall, slips below year-to-date average.· High interest rates and signs of weaker economic growth in major global economies outweigh expectations that interest rates have peaked.· Global base oils demand faces seasonal slowdown, could get support from blenders’ low stocks.· Demand could get further support from expectations that base oils prices face more limited risk of significant price adjustment amid more balanced fundamentals in Asia and Europe.· China’s base oils consumption shows more mixed signals, suggesting demand may be bottoming out.· Any rise in country’s lube demand would highlight blenders’ low stocks and their need to replenish those stocks fast.· China’s lube demand likely to face seasonal pick-up from 2H Feb 2023.· India’s base oils demand likely to hold steady to meet seasonal rise in consumption.· Indian blenders could take longer to lock in supplies in view of plentiful availability from different sources and still-firm prices versus competing fuels prices.· Europe’s base oils demand could get support from prospect of smaller slowdown in lube demand at end-2023 vs year earlier and stronger pick-up in demand at start of 2024.· Any such trend would speed up blenders’ need to replenish base oils inventories.· Blenders’ already-lower stocks would add to need to replenish inventories.· Domestic US base oils demand faces pressure from seasonal slowdown in lube consumption and expectations of healthy availability.· Overseas demand for US base oils could get boost from more competitive prices, especially in markets like Europe and in markets that Europe typically targets with export supplies.· Demand in Latin America likely to be more mixed.· Demand in Latin America likely to hold firm for base oils for lubricants production but weaken for other uses..Global base oils - week of Dec 4: Price outlook - arbitrage.Global base oils - week of Dec 4: Price outlook - margins
· Crude oil prices extend fall amid concern supply could exceed demand in Q1 2024.· Gasoil premium to crude oil extends gradual fall, slips below year-to-date average.· High interest rates and signs of weaker economic growth in major global economies outweigh expectations that interest rates have peaked.· Global base oils demand faces seasonal slowdown, could get support from blenders’ low stocks.· Demand could get further support from expectations that base oils prices face more limited risk of significant price adjustment amid more balanced fundamentals in Asia and Europe.· China’s base oils consumption shows more mixed signals, suggesting demand may be bottoming out.· Any rise in country’s lube demand would highlight blenders’ low stocks and their need to replenish those stocks fast.· China’s lube demand likely to face seasonal pick-up from 2H Feb 2023.· India’s base oils demand likely to hold steady to meet seasonal rise in consumption.· Indian blenders could take longer to lock in supplies in view of plentiful availability from different sources and still-firm prices versus competing fuels prices.· Europe’s base oils demand could get support from prospect of smaller slowdown in lube demand at end-2023 vs year earlier and stronger pick-up in demand at start of 2024.· Any such trend would speed up blenders’ need to replenish base oils inventories.· Blenders’ already-lower stocks would add to need to replenish inventories.· Domestic US base oils demand faces pressure from seasonal slowdown in lube consumption and expectations of healthy availability.· Overseas demand for US base oils could get boost from more competitive prices, especially in markets like Europe and in markets that Europe typically targets with export supplies.· Demand in Latin America likely to be more mixed.· Demand in Latin America likely to hold firm for base oils for lubricants production but weaken for other uses..Global base oils - week of Dec 4: Price outlook - arbitrage.Global base oils - week of Dec 4: Price outlook - margins
