Global base oils – week ahead: Demand

· Lube demand holds firm in Americas, weakening in Europe.

· Europe lube demand weakness focused more on industrial oils.

· Eurozone GDP growth slows in Q1, more challenging Q2 ahead.

· France Q1 economic growth stalls. Domestic demand slowing.

· Italy’s Q1 economy contracts; Germany’s economy grows.

· EC’s European economic sentiment indicator falls in April to 13-month low.

· US economic growth expected to pick up strongly in Q2.

· China’s April PMI falls to lowest in more than two years.

· Covid outbreak in China extends to Beijing – adds to global supply chain pressures.

· Lockdowns in China impact factories, domestic demand/car sales.

· China car sales seen falling by more than 30pc in April yoy because of lockdowns in key markets like Jilin and Shanghai.

· Weak Chinese demand frees up more base oil supplies to move to other markets.

· Steady domestic retail diesel prices in India coincide with rising imported N70 prices, narrowing the spread.

· India’s demand for very light grades is typically lower when the spread between those prices is narrower.

· Concern about base oil supply boosts demand from term buyers.

· Strong demand from term buyers curbs supply for spot buyers.

· Limited spot supply likely to boost demand for any volumes that are available.

· Mideast Gulf demand likely to improve following end of Ramadan.

· Europe/Africa demand for additional base oil volumes likely to remain stronger than other markets.