· Crude oil prices extend rise to highest in more than three months.· Crude oil prices get support from tightening supply and prospect of stronger-than-expected demand amid smaller-than-expected US economic slowdown.· Diesel premium to crude extends rise to highest since early this year amid signs of tight supply, prospect of revival in industrial activity.· Brazil cuts interest rates more than expected and for first time in three years.· Rate-cut follows signs of slowdown or pause in rate-increases in US and Europe.· Trend adds to signs that interest rates have or are close to peaking – but are likely to hold at high levels for an extended period..· Growing signs of upward base oils price pressure could incentivize blenders to bring forward procurement plans and arbitrage traders to lock in supplies.· Lube demand in Latin America, Europe and Asia set to fall less than expected in Q3 2023, rise in Q4 to levels that match or exceed year-earlier levels..· Smaller-than-expected fall in demand could leave blenders with lower-than-expected stocks of finished lubricants and feedstock supplies.· Smaller-than-expected fall in demand would coincide with blenders’ moves to keep lower inventories.· Blenders’ moves to cut inventory levels exacerbated fall in base oils demand in 1H 2023.· Blenders’ lower inventories contrast with high stocks in 1H 2022 amid concern about security of supply.· Blenders’ lower inventories, lower-than-expected slowdown in lube demand in Q3 2023, and seasonal pick-up in demand at end-Q3/early Q4 2023 set to overlap in coming weeks.· Lower-than-expected slowdown in lube demand coincides with signs of smaller-than-expected rise in surplus base oils supplies amid additional maintenance work/run-cuts/steady arbitrage shipments..Global base oils - week of Aug 7: Price outlook - margins.Base Oil News stories and analysis also available on ICIS platform
