Global base oils – week of Sep 12: Demand outlook

· Global economic growth faces growing pressure from rising interest rates, high inflation.

· US economy shows signs of ongoing strength – rising air travel, improving auto sales, boost from lower gasoline prices.

· US August auto sales rise for first time in 13 months.

· US central bank expected to raise interest rates sharply on 21 September.

· US 4-week average gasoline demand fell last week for 23^rd straight week.

· Atlantic hurricane season remains unusually quiet.

· US base oils buyers likely to be more cautious amid high prices, weaker overseas demand.

· Ongoing additives supply tightness curbs demand.

· Latin America's August auto sales more mixed.

· Brazil’s August auto sales growth gathers pace; Argentina’s sales growth slows further.

· Europe braces for economic slowdown on rising costs, prospect of energy supply disruption.

· European central bank raises interest rates sharply to curb high inflation - more increases to come.

· UK’s August car sales rise for first time in seven months, still second-lowest August volume since 2013.

· Post-holiday seasonal pick-up in base oils demand in Europe stays muted.

· Buyers likely to limit procurement amid concern about possibility of further drop in base oil prices.

· Southeast Asia demand holds firm, likely to be impacted by slowing global/China economy.

· China’s August export growth slows on weakening overseas demand; imports shrink as domestic economy slows.

· China's August car sales rise almost 30pc year on year, rise around 3pc from July amid promotions, preference for private over public vehicles.

· Chinese base oils demand improves vs recent months, still muted for time of year.

· Further lockdowns in China add to pressure on economic growth, incentivize blenders to procure smaller volumes to limit exposure to risk of lockdown disruptions.

· Asia-Pacific base oils demand likely to get support from signs of steadier base oils prices, easing concern about exposure to lower prices.

· Indian demand likely to gather pace ahead of seasonal rise in demand.

· Indian retail diesel premium to light-grade base oils rebounds in recent weeks, still narrower than in recent years.

· India's demand for light-grade base oils typically rises when premium is wide.