· Crude oil prices hold close to highest since Nov 2023 as OPEC+ extends crude output cuts through Q2 2024.· Diesel premium to crude oil stays firmer than in Q4 2023, down from highs in early Feb 2024.· Global base oils demand usually gets a seasonal boost from end of first quarter of the year in preparation for spring oil-change season.· Asia’s base oils demand likely to get support from such a boost and from moves to increase sales ahead of financial year-end in some markets.· China’s base oils demand shows signs of improving gradually, with buyers preferring to maintain lower stocks.· China’s demand likely to get support from need for buyers to replenish lower stocks more frequently.· China’s demand for overseas supplies focuses on Group I bright stock.· India’s base oils demand could be more muted as buyers’ healthy stocks curb urgency to lock in more supplies unless prices are at competitive levels.· Signs of prices at competitive levels in markets like US could support steady demand from India.· Europe’s base oils demand could get support from seasonal pick-up in lube demand even if blenders stick with strategy of maintaining lower inventories.· Strategy requires more frequent replenishment of supplies, especially as and when demand improves.· Strategy leaves buyers more exposed if availability of supply is tighter than expected.· US base oils demand shows little sign of reacting to recent moves by several refiners to raise posted prices.· Wide gap between US domestic and export prices, and signs of healthy availability of supply, support buyers’ strategy of maintaining low stocks.· Trend could support more frequent moves to top up inventories when seasonal pick-up in lube demand begins..Global base oils margins outlook: Week of March 4.Global base oils arb outlook: Week of March 4.Base Oil News stories and analysis also available on ICIS platform
