· Crude oil prices edge up after sliding last week to lowest since H1 March 2024.· Crude oil prices fell last week on concern that higher-for-longer interest rates will dampen oil demand.· Diesel premium to crude oil holds close to lowest in a year.· Sliding crude/diesel prices trigger strong rise in base oils margins.· Weak diesel premium to crude magnifies strength of base oils values.· Concern that base oils margins are unreflective of supply-demand dynamics could incentivize buyers to procure smaller volumes to limit their exposure to any subsequent price adjustment.· Signs of relatively muted seasonal pick-up in end-user demand give blenders more leverage to maintain lower stocks.· Asia’s base oils demand shows signs of weakening as prices in destination markets like China and India lag rising FOB Asia cargo prices.· Disconnect between price-trends raises prospect of tighter supply in those destination markets.· Lack of price-response in those destination markets suggest they are comfortable with lower supply.· Europe’s demand for premium-grade base oils could get a boost amid increasingly competitive prices and more ready availability vs Group I supplies.· Recent outperformance of Group I domestic light-grade prices points to firmer supply-demand fundamentals for the grade.· Strong rise in US Group II domestic light-grade prices vs other grades and other regions points to firmer supply-demand fundamentals for the grade.· Muted demand suggests supply is the key factor supporting the firmer prices.· Tighter supply could have larger repercussions for overseas markets amid more limited surplus availability.· Lack of price-response in destination markets like India suggest those outlets are comfortable with current availability of supply..Global base oils margins outlook: Week of 6 May.Global base oils arb outlook: Week of 6 May.Asia base oils demand outlook: Week of 6 May.Asia base oils supply outlook: Week of 6 May
· Crude oil prices edge up after sliding last week to lowest since H1 March 2024.· Crude oil prices fell last week on concern that higher-for-longer interest rates will dampen oil demand.· Diesel premium to crude oil holds close to lowest in a year.· Sliding crude/diesel prices trigger strong rise in base oils margins.· Weak diesel premium to crude magnifies strength of base oils values.· Concern that base oils margins are unreflective of supply-demand dynamics could incentivize buyers to procure smaller volumes to limit their exposure to any subsequent price adjustment.· Signs of relatively muted seasonal pick-up in end-user demand give blenders more leverage to maintain lower stocks.· Asia’s base oils demand shows signs of weakening as prices in destination markets like China and India lag rising FOB Asia cargo prices.· Disconnect between price-trends raises prospect of tighter supply in those destination markets.· Lack of price-response in those destination markets suggest they are comfortable with lower supply.· Europe’s demand for premium-grade base oils could get a boost amid increasingly competitive prices and more ready availability vs Group I supplies.· Recent outperformance of Group I domestic light-grade prices points to firmer supply-demand fundamentals for the grade.· Strong rise in US Group II domestic light-grade prices vs other grades and other regions points to firmer supply-demand fundamentals for the grade.· Muted demand suggests supply is the key factor supporting the firmer prices.· Tighter supply could have larger repercussions for overseas markets amid more limited surplus availability.· Lack of price-response in destination markets like India suggest those outlets are comfortable with current availability of supply..Global base oils margins outlook: Week of 6 May.Global base oils arb outlook: Week of 6 May.Asia base oils demand outlook: Week of 6 May.Asia base oils supply outlook: Week of 6 May
