· Strong US jobs growth in May contrasts with slowing wages growth, points to still-resilient US economy.· US Fed likely to continue to raise interest rates even if it pauses on a rate-increase in June.· US weekly gasoline demand rises at end-May for tenth week, rises at fastest pace in five weeks..· US base oils supplier's move to cut Group III posted prices could raise expectations of further price-cuts for other grades, incentivizing blenders to hold back.· US’ March domestic base oils demand falls to record low at time of year when blenders typically start to replenish stocks.· Size of drop in demand outpaces lube consumption, suggesting blenders were working down inventories.· Change in blenders’ procurement timetable complicates refiners’ supply plans.· Change in procurement timetable triggers surplus volumes in Q1/Q2, could conversely trigger tightness at times when there is typically a surplus.· US domestic demand weakness counters impact of surge in exports to clear stocks..· Lower-than-usual demand leaves persistent lingering surplus throughout Q2 2023. · Argentina’s falling lube demand in April adds to signs of regionwide slowdown in consumption..· Argentina’s lube blenders slash April lube output, cutting lube supply surplus over demand to seven-month low.· Move suggests blenders seek to trim inventory levels at a time when demand faces sustained pressure.· Latin America’s demand for base oils from US could still rise even as regional lube demand falls as slowdown in arb supplies from Asia prompts buyers to cover more of their requirements with US supplies.· The move would highlight importance of closing off arbitrage opportunities from other markets when slowing regional demand cuts total requirements. · Argentina’s April base oil imports show pause in arbitrage shipments from markets like northeast Asia and Mideast Gulf, reflecting that trend.· Pause in arbitrage shipments follows fall in US prices in recent months to more competitive levels vs supplies from other regions.· Trend should continue to support firmer Latin America demand for US supplies.· Brazil’s base oils imports continue to hold firmer in April amid more balanced domestic supply-demand fundamentals.· Pick-up in Brazil’s imports of Group III base oils to highest in more than a year could reflect moves to redirect supplies away from the US.· More signs of slowing economic growth and falling inflation in Europe raise expectations that wave of interest-rate increases is close to peaking.· Netherlands’ Q1 base oils demand rises strongly vs Q4 2022, lags Q1 2022 levels..· Europe’s demand for Group III base oils could ease because of blenders’ growing confidence that they can secure supplies as and when required.· Tighter Group III supply over past year had added to demand as buyers sought to lock in volumes to ensure sufficient supply to cover requirements.· Easing tightness raises prospect of blenders trimming Group III base oils inventories, mirroring trend for Group I and Group II base oils..Asia base oils – week of June 5: Demand outlook.Contact us for more information about the data for these stories
· Strong US jobs growth in May contrasts with slowing wages growth, points to still-resilient US economy.· US Fed likely to continue to raise interest rates even if it pauses on a rate-increase in June.· US weekly gasoline demand rises at end-May for tenth week, rises at fastest pace in five weeks..· US base oils supplier's move to cut Group III posted prices could raise expectations of further price-cuts for other grades, incentivizing blenders to hold back.· US’ March domestic base oils demand falls to record low at time of year when blenders typically start to replenish stocks.· Size of drop in demand outpaces lube consumption, suggesting blenders were working down inventories.· Change in blenders’ procurement timetable complicates refiners’ supply plans.· Change in procurement timetable triggers surplus volumes in Q1/Q2, could conversely trigger tightness at times when there is typically a surplus.· US domestic demand weakness counters impact of surge in exports to clear stocks..· Lower-than-usual demand leaves persistent lingering surplus throughout Q2 2023. · Argentina’s falling lube demand in April adds to signs of regionwide slowdown in consumption..· Argentina’s lube blenders slash April lube output, cutting lube supply surplus over demand to seven-month low.· Move suggests blenders seek to trim inventory levels at a time when demand faces sustained pressure.· Latin America’s demand for base oils from US could still rise even as regional lube demand falls as slowdown in arb supplies from Asia prompts buyers to cover more of their requirements with US supplies.· The move would highlight importance of closing off arbitrage opportunities from other markets when slowing regional demand cuts total requirements. · Argentina’s April base oil imports show pause in arbitrage shipments from markets like northeast Asia and Mideast Gulf, reflecting that trend.· Pause in arbitrage shipments follows fall in US prices in recent months to more competitive levels vs supplies from other regions.· Trend should continue to support firmer Latin America demand for US supplies.· Brazil’s base oils imports continue to hold firmer in April amid more balanced domestic supply-demand fundamentals.· Pick-up in Brazil’s imports of Group III base oils to highest in more than a year could reflect moves to redirect supplies away from the US.· More signs of slowing economic growth and falling inflation in Europe raise expectations that wave of interest-rate increases is close to peaking.· Netherlands’ Q1 base oils demand rises strongly vs Q4 2022, lags Q1 2022 levels..· Europe’s demand for Group III base oils could ease because of blenders’ growing confidence that they can secure supplies as and when required.· Tighter Group III supply over past year had added to demand as buyers sought to lock in volumes to ensure sufficient supply to cover requirements.· Easing tightness raises prospect of blenders trimming Group III base oils inventories, mirroring trend for Group I and Group II base oils..Asia base oils – week of June 5: Demand outlook.Contact us for more information about the data for these stories
