· Crude oil prices rebound at start of week following last week’s slump as increased geopolitical risk counters concern about impact of high interest rates on economic growth and crude oil demand.· Firmer crude prices would add to expectations of interest rates staying higher for longer.· Diesel premium to crude oil stays close to weakest in more than two months, suggesting demand concerns outweigh signs of tight middle distillates supplies.· Crude oil price volatility and tension between supply and demand likely to prompt base oils buyers to hold back, and refiners to pause before making any price adjustments.· Expectations that base oils prices will hold steady or fall could bring forward seasonal slowdown in consumption during final weeks of year.· Volatility of feedstock prices and high interest rates re-affirm benefit for blenders of holding low stocks and replenishing inventories more frequently.· Prospect of rise in surplus base oils supply over coming weeks adds to feasibility and attraction of such a strategy.· Base oils demand could fall less steeply than at end-2022 when blenders' moves to cut high inventories magnified the impact of seasonal slowdown in demand.· Markets face just a seasonal slowdown in demand this time..Global base oils - week of Oct 9: Price outlook - margins
· Crude oil prices rebound at start of week following last week’s slump as increased geopolitical risk counters concern about impact of high interest rates on economic growth and crude oil demand.· Firmer crude prices would add to expectations of interest rates staying higher for longer.· Diesel premium to crude oil stays close to weakest in more than two months, suggesting demand concerns outweigh signs of tight middle distillates supplies.· Crude oil price volatility and tension between supply and demand likely to prompt base oils buyers to hold back, and refiners to pause before making any price adjustments.· Expectations that base oils prices will hold steady or fall could bring forward seasonal slowdown in consumption during final weeks of year.· Volatility of feedstock prices and high interest rates re-affirm benefit for blenders of holding low stocks and replenishing inventories more frequently.· Prospect of rise in surplus base oils supply over coming weeks adds to feasibility and attraction of such a strategy.· Base oils demand could fall less steeply than at end-2022 when blenders' moves to cut high inventories magnified the impact of seasonal slowdown in demand.· Markets face just a seasonal slowdown in demand this time..Global base oils - week of Oct 9: Price outlook - margins