· Crude oil prices mostly hold in a $85-95/bl range since 2H Aug 2023 as prospect of global economic slowdown balances out geopolitical concerns. · Diesel premium to crude oil steadies, down from highs at end-Sep 2023, still well above typical levels.· Prospect of elevated interest rates well into next year in US/Europe expected to weigh on global economic activity.· Prospect of high interest rates and muted economic growth in coming months adds to incentive for blenders to maintain low base oils/lubricants stocks.· Prospect of smaller-than-usual volume of surplus base oils in Europe and Asia at year-end could limit downward price-pressure and support steadier procurement plans in those regions.· Asia’s lube demand likely to hold firm in Q4 2023, even if pace of rebound slows from signs of unexpectedly strong growth at end-Q3 2023.· Firmer demand likely to absorb more regional base oils supplies, curbing surplus volumes for other regions.· China’s demand for overseas supplies of Group III base oils could face further change amid rapid rise in domestic production in recent months.· India’s demand for supplies likely to stay firm amid seasonal pick-up in consumption.· Prospect of rise in choice of supply could prompt buyers to hold back before locking in volumes. · Slowdown in Europe’s lube demand shows more signs of bottoming out.· Trend would coincide with blenders’ more cautious inventory-management.· Trend would support steadier procurement over coming months, even if outright volumes stay lower than usual.· Demand for Group I base oils supplies from Europe shows signs of getting sustained boost from Asia.· Trend would curb further the availability of Group I supplies in Europe.· US demand faces typical seasonal slowdown.· Prospect of larger-than-expected availability of supply and lower crude oil prices adds to blenders’ incentive to hold back for now.· Mexico’s stricter rules on base oils imports likely to add to size of US supply-surplus at year-end.· Blenders in other parts of Latin America could receive offers of more supplies from US as sellers seek alternative outlets instead of Mexico.· Trend could curb their interest in surplus supplies from other markets like Asia..Global base oils - week of Nov 6: Price outlook - arbitrage
· Crude oil prices mostly hold in a $85-95/bl range since 2H Aug 2023 as prospect of global economic slowdown balances out geopolitical concerns. · Diesel premium to crude oil steadies, down from highs at end-Sep 2023, still well above typical levels.· Prospect of elevated interest rates well into next year in US/Europe expected to weigh on global economic activity.· Prospect of high interest rates and muted economic growth in coming months adds to incentive for blenders to maintain low base oils/lubricants stocks.· Prospect of smaller-than-usual volume of surplus base oils in Europe and Asia at year-end could limit downward price-pressure and support steadier procurement plans in those regions.· Asia’s lube demand likely to hold firm in Q4 2023, even if pace of rebound slows from signs of unexpectedly strong growth at end-Q3 2023.· Firmer demand likely to absorb more regional base oils supplies, curbing surplus volumes for other regions.· China’s demand for overseas supplies of Group III base oils could face further change amid rapid rise in domestic production in recent months.· India’s demand for supplies likely to stay firm amid seasonal pick-up in consumption.· Prospect of rise in choice of supply could prompt buyers to hold back before locking in volumes. · Slowdown in Europe’s lube demand shows more signs of bottoming out.· Trend would coincide with blenders’ more cautious inventory-management.· Trend would support steadier procurement over coming months, even if outright volumes stay lower than usual.· Demand for Group I base oils supplies from Europe shows signs of getting sustained boost from Asia.· Trend would curb further the availability of Group I supplies in Europe.· US demand faces typical seasonal slowdown.· Prospect of larger-than-expected availability of supply and lower crude oil prices adds to blenders’ incentive to hold back for now.· Mexico’s stricter rules on base oils imports likely to add to size of US supply-surplus at year-end.· Blenders in other parts of Latin America could receive offers of more supplies from US as sellers seek alternative outlets instead of Mexico.· Trend could curb their interest in surplus supplies from other markets like Asia..Global base oils - week of Nov 6: Price outlook - arbitrage
