· US base oils demand likely to remain muted as firm prices, healthy availability incentivize buyers to hold off.· Wide spread between US domestic and export prices, and US posted prices and spot prices, add to attraction of holding back for now.· Latin America’s base oils demand faces prospect of slowing amid likely rise in regional supply.· Typical seasonal rise in Latin America’s lube demand in first quarter of the year could absorb higher regional output, sustain firm requirements for overseas supplies.· Competitive US export prices and closed arbitrage from Asia could provide further support to demand for US supplies..· US November base oils exports to Mexico hold steady vs Oct 2023, maintain narrower surplus vs Mexico’s lube demand.· Trend suggests Mexico’s demand for US base oils is unlikely to fall much further.· Trend still leaves US refiners seeking alternative outlets in place of much larger volumes that they moved to Mexico in first three quarters of 2023..· Argentina likely to prioritise shipments from US rather than other markets to cover any overseas requirements in view of more competitive US prices..· Argentina’s demand for US supplies holds firm in 2H 2023 as drop in arbitrage shipments balances out fall in domestic lube demand.· Demand for US supplies could still wane as sharp currency depreciation incentivizes Argentina to rely more on domestic supplies..· Latin America’s shortfall of supply versus demand widens in Oct 2023 close to its highest in years..· Shortfall widens as regional output slumps to multi-year low, while demand rises.· Trend boosts Latin America’s demand for overseas supplies in Q4 2023, especially from the US.· Expected pick-up in Latin America’s base oils output in Q1 2024 could curb size of requirements from overseas markets..· Europe blenders’ moves to maintain lower base oils stocks in 2023 could curb the volume of surplus supplies they needed to clear before end-2023, cushioning size of slowdown in demand at year-end/start of 2024.· Regional demand for Europe Group I/II base oils could still slow in short term following slump in region’s Group I export prices.· Any subsequent adjustment in Group I domestic prices could impact demand for Group II base oils.· Portugal’s November lube demand rises for fourth month..· Spain’s November lube demand rises for sixth month..· Higher demand adds to ongoing recovery in Mediterranean region, cushions size of seasonal dip in Europe’s consumption at year-end..· Europe’s October base oils demand rises from previous month while supply falls..· Trend slows build-up of regional supply surplus in Q4 2023..Global base oils - week of Jan 15: Demand outlook.Global base oils - week of Jan 15: Price outlook - margins.Asia base oils - week of Jan 15: Demand outlook
· US base oils demand likely to remain muted as firm prices, healthy availability incentivize buyers to hold off.· Wide spread between US domestic and export prices, and US posted prices and spot prices, add to attraction of holding back for now.· Latin America’s base oils demand faces prospect of slowing amid likely rise in regional supply.· Typical seasonal rise in Latin America’s lube demand in first quarter of the year could absorb higher regional output, sustain firm requirements for overseas supplies.· Competitive US export prices and closed arbitrage from Asia could provide further support to demand for US supplies..· US November base oils exports to Mexico hold steady vs Oct 2023, maintain narrower surplus vs Mexico’s lube demand.· Trend suggests Mexico’s demand for US base oils is unlikely to fall much further.· Trend still leaves US refiners seeking alternative outlets in place of much larger volumes that they moved to Mexico in first three quarters of 2023..· Argentina likely to prioritise shipments from US rather than other markets to cover any overseas requirements in view of more competitive US prices..· Argentina’s demand for US supplies holds firm in 2H 2023 as drop in arbitrage shipments balances out fall in domestic lube demand.· Demand for US supplies could still wane as sharp currency depreciation incentivizes Argentina to rely more on domestic supplies..· Latin America’s shortfall of supply versus demand widens in Oct 2023 close to its highest in years..· Shortfall widens as regional output slumps to multi-year low, while demand rises.· Trend boosts Latin America’s demand for overseas supplies in Q4 2023, especially from the US.· Expected pick-up in Latin America’s base oils output in Q1 2024 could curb size of requirements from overseas markets..· Europe blenders’ moves to maintain lower base oils stocks in 2023 could curb the volume of surplus supplies they needed to clear before end-2023, cushioning size of slowdown in demand at year-end/start of 2024.· Regional demand for Europe Group I/II base oils could still slow in short term following slump in region’s Group I export prices.· Any subsequent adjustment in Group I domestic prices could impact demand for Group II base oils.· Portugal’s November lube demand rises for fourth month..· Spain’s November lube demand rises for sixth month..· Higher demand adds to ongoing recovery in Mediterranean region, cushions size of seasonal dip in Europe’s consumption at year-end..· Europe’s October base oils demand rises from previous month while supply falls..· Trend slows build-up of regional supply surplus in Q4 2023..Global base oils - week of Jan 15: Demand outlook.Global base oils - week of Jan 15: Price outlook - margins.Asia base oils - week of Jan 15: Demand outlook