· Global crude oil prices stay close to lowest this year as concerns about demand weakness in world’s largest markets outweigh geopolitical tensions and weaker US dollar. · Diesel premium to crude oil stays in narrow, lower range, curbing attraction of increasing output of the motor fuel.· Global base oils demand could face pressure as lower crude oil/diesel prices add to incentive for buyers to hold back at a time of year when demand already faces a seasonal slowdown.· Signs of sufficient supply in most markets add to lack of urgency to lock in additional volumes.· Asia base oils demand typically starts to revive around this time of year as buyers seek supplies to cover seasonal pick-up in consumption in late-Q3.· China’s rising domestic price premium to FOB Asia prices makes arbitrage more feasible, pointing to requirements for additional supplies.· China’s relatively muted demand, and more feasible arbitrage, points to tighter domestic supply.· Signs of steady-to-higher shipments to India in recent weeks, and closed arbitrage, suggests buyers are comfortable with term volumes.· Europe’s demand for Group I base oils shows signs of holding firm even with tighter structural supply and prices at increasingly strong levels versus premium-grade base oils.· Concern about tighter supply typically incentivizes buyers to seek other base oil grades instead for which volumes are more readily available.· Europe’s firm Group I demand shows signs of absorbing more supplies from other sources such as Saudi Arabia.· Dynamic could boost demand from buyers that face slowdown in supplies from those other sources.· US demand likely to get ongoing support from stock-building as another major storm highlights risks of weather-related disruptions over the coming weeks.· Stock-building balances out for now seasonal slowdown in domestic demand.· Demand for additional US supplies likely to stay more muted in overseas markets like Europe and India.· Latin America’s base oils demand likely to hold firm for supplies from US and from other sources amid signs of tighter supply-demand fundamentals..Global base oils margins outlook: Week of 5 Aug.Global base oils arb outlook: Week of 5 Aug.Asia base oils demand outlook: Week of 5 Aug.Asia base oils supply outlook: Week of 5 Aug
