Global base oils – week of Sep 19: Demand outlook

·        Global economic growth set to face more pressure from even higher interest rates.

·        Global central banks set to raise interest rates sharply this week to combat high inflation.

·        IEA sees switch from gas to oil over coming months countering impact of economic slowdown on oil demand.

·        US August retail sales hold unexpectedly firm; inflation stays high.

·        US August industrial production already falls from July.

·        US September consumer confidence edges up as gasoline prices fall.

·        US gasoline demand falls over past week to lowest since February.

·        Hurricane strikes Puerto Rico, set to bypass US.

·        Drop in US base oils posted prices could trigger pick-up in demand from buyers that had held back in anticipation of lower prices.

·        Buyers likely to remain cautious amid signs of sufficient base oils supply, concern about demand outlook.

·        Latin American buyers likely to continue to target Asia-Pacific supplies.

·        Prospect of higher Europe interest rates set to compound regional cost pressures.

·        France’s July industrial production shrinks at fastest pace since early 2021.

·        UK’s August retail sales slide as consumers cut spending.

·        Europe’s August car sales rise for first time in 14 months but remain far below pre-pandemic levels.

·        Rising Europe auto sales add to uptick in global sales.

·        Spain’s July lube demand falls, adding to signs of slowing regional consumption.

·        Slower-than-usual post-summer-holidays lube demand in Europe gives buyers leverage to hold back.

·        Expectations of lower prices add to incentivize for European buyers to hold back.

·        Asia-Pacific base oils demand likely to get support from expectations that regional prices have bottomed out, surplus has shrunk.

·        Asia-Pacific base oils demand likely to get support from structural economic strength in SE Asia, India.

·        Regional demand likely to get support from seasonal improvement in Chinese demand.

·        China lifts lockdown in southwestern city of Chengdu.

·        China's continuation of zero-Covid policy means more lockdowns likely.

·        China’s August car sales rise 37pc year on year, reflecting/adding to strong rise in country’s August retail sales.

·        China’s August commercial vehicle sales rise 4pc, reflecting pressure on industrial activity and relatively weak industrial production growth in August.

·        China’s car sales flatline in 1H Sep year on year amid lockdown concerns, earlier timing of mid-Autumn festival holiday.

·        Firm economic growth in Indonesia likely to sustain strong lube/base oils demand, curb Group I exports.

·        India’s base oils demand likely to rise in preparation for festival season and amid expectations prices have bottomed out.

·        India’s demand for very light grades likely to remain muted.