· Signs of slowing US economic growth raise expectations that any interest-rate rise in May is likely to be the last.· US gasoline demand rises last week for second week and at fastest pace in more than a year..· Rising cost of money and borrowing incentivizes blenders to maintain cautious procurement strategy even after spike in crude prices last week.· Blenders’ expectations that supply will remain sufficient even amid seasonal rise in demand curbs need to hold larger stocks.· US domestic/overseas base oils/lube demand exceeds supply in January.· Trend needs to continue over coming months to reverse supply-build and support prices.· US blenders’ caution over inventory levels could require refiners to adjust usual production strategies to maintain trend of demand exceeding supply.· Europe’s economic growth stays weak but firmer than expected. Prospect of further rise in interest rates to keep pressure on growth outlook.· France’s March car sales rise 24pc yoy, climb for seventh time in eight months.· UK’s March car sales rise for eighth month; alternative-fuel vehicle sales account for more than 50pc of total for seventh month..· Rebounding crude oil prices raise expectations of higher base oils prices, incentivizing Europe’s blenders to replenish stocks.· Round of stock replenishment would be from lower-than-usual inventory levels.· Signs of rising month-on-month European lube demand in Q1 2023, and blenders’ reluctance to replenish stocks, suggests they preferred to work down existing inventories.· Prospect of procurement of smaller volumes would require more frequent rounds of stock-replenishment.· Trend would sustain steadier demand instead of surge then pause in demand.· Europe’s January lube demand falls more slowly, rises from December. Trend shows signs of continuing through rest of Q1 2023.· Turkey’s falling imports from Russia in February highlight Russia’s limited alternative outlets for its supplies.· Europe’s base oils supplies to Turkey rise in February and also move to other outlets like Mideast Gulf and Latin America – highlighting more diverse options to clear surplus supplies.· Turkey’s imports from Europe rise in February after prices fall to smaller premium to prices for Russian supplies.· Trend likely to keep pressure on prices for Russian base oils to maintain steep discount to European supplies to deter recurrence of such moves..Global base oils - week of April 10: Demand outlook
· Signs of slowing US economic growth raise expectations that any interest-rate rise in May is likely to be the last.· US gasoline demand rises last week for second week and at fastest pace in more than a year..· Rising cost of money and borrowing incentivizes blenders to maintain cautious procurement strategy even after spike in crude prices last week.· Blenders’ expectations that supply will remain sufficient even amid seasonal rise in demand curbs need to hold larger stocks.· US domestic/overseas base oils/lube demand exceeds supply in January.· Trend needs to continue over coming months to reverse supply-build and support prices.· US blenders’ caution over inventory levels could require refiners to adjust usual production strategies to maintain trend of demand exceeding supply.· Europe’s economic growth stays weak but firmer than expected. Prospect of further rise in interest rates to keep pressure on growth outlook.· France’s March car sales rise 24pc yoy, climb for seventh time in eight months.· UK’s March car sales rise for eighth month; alternative-fuel vehicle sales account for more than 50pc of total for seventh month..· Rebounding crude oil prices raise expectations of higher base oils prices, incentivizing Europe’s blenders to replenish stocks.· Round of stock replenishment would be from lower-than-usual inventory levels.· Signs of rising month-on-month European lube demand in Q1 2023, and blenders’ reluctance to replenish stocks, suggests they preferred to work down existing inventories.· Prospect of procurement of smaller volumes would require more frequent rounds of stock-replenishment.· Trend would sustain steadier demand instead of surge then pause in demand.· Europe’s January lube demand falls more slowly, rises from December. Trend shows signs of continuing through rest of Q1 2023.· Turkey’s falling imports from Russia in February highlight Russia’s limited alternative outlets for its supplies.· Europe’s base oils supplies to Turkey rise in February and also move to other outlets like Mideast Gulf and Latin America – highlighting more diverse options to clear surplus supplies.· Turkey’s imports from Europe rise in February after prices fall to smaller premium to prices for Russian supplies.· Trend likely to keep pressure on prices for Russian base oils to maintain steep discount to European supplies to deter recurrence of such moves..Global base oils - week of April 10: Demand outlook
