· US gasoline demand rises for seventeenth straight week in mid-July..· US blenders’ preference to hold lower stocks exposes them to risk of unexpected supply disruptions.· US market has historically faced weather-related supply disruptions during Atlantic hurricane season, especially from 2H August onwards.· US posted prices hold steady, removing one deterrent from holding back demand.· Lube demand shows signs of holding firmer than expected in Latin America’s largest markets.· Trend likely to support steady demand for US base oils supplies amid less workable arbitrage from Asia, prospect of upcoming plant maintenance work in Latin America.· Europe’s lube demand slump gathers pace at start of Q2 2023, compounding blenders’ reluctance to procure additional feedstock supplies..· Slump in Germany’s lubricants supply in first four months of 2023 highlights size of drop in Europe’s base oils requirements..· Regional demand weakness more than counters impact of plant maintenance work during Q2 2023.· Regional demand weakness raises prospect of triggering supply-build in Q3 2023 unless refiners cut production or keep units offline.· France’s May lube demand falls sharply year on year and rises only slightly from April.· Demand weakness contrasts with smaller yoy contraction in other key European markets, lags stronger month-on-month rise in demand in those other markets.· France’s May PCMO demand contracts for third month, pointing to weakening activity in the services sector..· France’s lube demand weakness had previously been concentrated more in industrial oils.· Trend points to more diverse demand trends throughout Europe and signs of earlier improvement in consumption in Mediterranean region.· Nigeria’s imports of regular flow of Group I and Group II base oils from US through Q2 2023 highlight change in trade flows in response to tighter Group I supply in Europe and sharp slowdown in Russian base oils shipments to West Africa..· Those structural changes are likely to be prolonged, raising prospect of sustained buying interest from Nigeria in Group I/II supplies from US..Global base oils - week of July 24: Price outlook - margins
· US gasoline demand rises for seventeenth straight week in mid-July..· US blenders’ preference to hold lower stocks exposes them to risk of unexpected supply disruptions.· US market has historically faced weather-related supply disruptions during Atlantic hurricane season, especially from 2H August onwards.· US posted prices hold steady, removing one deterrent from holding back demand.· Lube demand shows signs of holding firmer than expected in Latin America’s largest markets.· Trend likely to support steady demand for US base oils supplies amid less workable arbitrage from Asia, prospect of upcoming plant maintenance work in Latin America.· Europe’s lube demand slump gathers pace at start of Q2 2023, compounding blenders’ reluctance to procure additional feedstock supplies..· Slump in Germany’s lubricants supply in first four months of 2023 highlights size of drop in Europe’s base oils requirements..· Regional demand weakness more than counters impact of plant maintenance work during Q2 2023.· Regional demand weakness raises prospect of triggering supply-build in Q3 2023 unless refiners cut production or keep units offline.· France’s May lube demand falls sharply year on year and rises only slightly from April.· Demand weakness contrasts with smaller yoy contraction in other key European markets, lags stronger month-on-month rise in demand in those other markets.· France’s May PCMO demand contracts for third month, pointing to weakening activity in the services sector..· France’s lube demand weakness had previously been concentrated more in industrial oils.· Trend points to more diverse demand trends throughout Europe and signs of earlier improvement in consumption in Mediterranean region.· Nigeria’s imports of regular flow of Group I and Group II base oils from US through Q2 2023 highlight change in trade flows in response to tighter Group I supply in Europe and sharp slowdown in Russian base oils shipments to West Africa..· Those structural changes are likely to be prolonged, raising prospect of sustained buying interest from Nigeria in Group I/II supplies from US..Global base oils - week of July 24: Price outlook - margins