Global base oils demand outlook: Week of April 8

·        Crude oil prices hold close to highest since Oct 2023 after sustained rise over past month as prospect of firmer-than-expected demand magnifies impact of tighter supply.

·        Diesel premium to crude oil holds steady close to lowest since July 2023.

·        Base oils demand could get support from prospect of upward pressure on prices in response to rising feedstock costs.

·        Demand could be more responsive to that prospect in US and Europe, where lube demand faces a seasonal pick-up, and less responsive in Asia, where demand faces a seasonal slowdown.

·        Asia’s base oils demand for spot supplies could ease as buyers cover more requirements with term volumes.

·        China’s base oils demand shows signs of staying sufficient to absorb domestic supplies, with limited requirements for top-up supplies from regional refiners.

·        India’s base oils demand could face seasonal slowdown at start of Q2 2024.

·        Signs of steady flows from Saudi Arabia to India, and prospect of large volume of shipments from South Korea and US, curb further any urgency to buy.

·        Europe’s base oils demand could get support from signs of firmer fundamentals and upward price pressure.

·        Europe’s Group I brightstock export price premium to domestic prices widens further.

·        Trend points to firm overseas demand, raising prospect of tighter regional supply. 

·        US base oils demand could get boost from signs of more balanced fundamentals and additional moves to raise posted prices.

·        Several refiners last week announce additional rise in posted prices; the decision could trigger similar moves by other refiners.

·        Demand could get further boost from buyers seeking to lock in additional supplies at current price levels before any such announcements.