· US base oils demand could revive earlier than usual from start of 2024 as blenders replenish low stocks more frequently.· Recent round of US posted price-cuts eases buyers’ concern about exposure to lower prices, especially for Group II heavy grades.· Overseas demand for US supplies could get boost from increasingly competitive prices and more feasible arb opportunities..· Latin America’s base oils demand for finished lubricants could get support from firmer-than-expected lube demand in Q4 2023.· Latin America’s lube demand then seen extending rise in Q1 2024..· Firmer regional consumption partly reflects unexpectedly strong and sustained rise in Brazil’s lube demand into Q4 2023.· US refiners would be key beneficiaries of stronger-than-expected rise in lube demand in Latin America amid less workable arbitrage from Asia to Americas..· US could see pick-up in demand for Group II base oils from Europe if that market continues transition to using more of the premium-grade supplies.· US base oils exports to Europe fell in 2023 partly because of rise in regional production..· Any further rise in Europe’s demand for Group II base oils could require more supplies from overseas until regional production capacity rises..· Europe’s base oils demand could improve earlier than usual next year, reflecting blenders’ low stocks and signs that contraction in lube demand is slowing.· Europe’s lube demand faces seasonal slowdown at year-end. But pace of contraction from year earlier shows signs of slowing.· Europe’s lube demand faces prospect of stronger rise in Q1 2024 from Q4 2023 compared with Q1 2023 from Q4 2022..· Steadier-to-firmer demand could support earlier pick-up in blenders’ requirements to replenish low base oils stocks.· Europe’s Group III price premium to Group II prices falls to narrowest in more than a year.· Europe’s Group III price premium to Group I prices holds at narrowest in more than a year.· Trend could incentivize blenders to use more Group III base oils instead of Group I and Group II.· Europe’s Group I heavy-neutrals demand could get boost amid widening SN 500 discount to Group II heavy-grade prices..· Italy’s October lube demand rises for fifth month as higher consumption of industry-related oils outweighs weaker consumption of passenger-car engine oils..· Rising industrial oils consumption and weaker PCMO demand contrasts with year to mid-2023, when roles were reversed.· Trend points to slowdown in services sector, steadier activity in industrial sector.· Italy’s firmer demand extends growing contrast between reviving consumption in Mediterranean region and still-weak demand in northern Europe.· Trend curbs slowdown in Europe’s lube demand over past year, points to steadier consumption over coming months..· Germany’s lube demand extends steep slide in Sept 2023.· Sustained fall in demand in Europe’s largest market could push back timing and strength of any recovery in region’s lube consumption.· Fall in Germany’s domestic lube demand exceeds pace of fall in its lube exports for third time in four months..· Trend points to stronger lube demand in regional markets than in Germany’s domestic market..· Global base oils exports to Egypt fall in Q3 2023 to lowest in more than four years..· Slowdown in shipments points to weaker base oils and lube consumption in the country.· Ongoing pause in shipments from Asia to Egypt highlight Asia’s more balanced supply and the less attractive arbitrage to Europe and North Africa..Asia base oils - week of Dec 4: Demand outlook.Global base oils - week of Dec 4: Price outlook - margins.Global base oils - week of Dec 4: Price outlook - arbitrage.Global base oils - week of Dec 4: Demand outlook
· US base oils demand could revive earlier than usual from start of 2024 as blenders replenish low stocks more frequently.· Recent round of US posted price-cuts eases buyers’ concern about exposure to lower prices, especially for Group II heavy grades.· Overseas demand for US supplies could get boost from increasingly competitive prices and more feasible arb opportunities..· Latin America’s base oils demand for finished lubricants could get support from firmer-than-expected lube demand in Q4 2023.· Latin America’s lube demand then seen extending rise in Q1 2024..· Firmer regional consumption partly reflects unexpectedly strong and sustained rise in Brazil’s lube demand into Q4 2023.· US refiners would be key beneficiaries of stronger-than-expected rise in lube demand in Latin America amid less workable arbitrage from Asia to Americas..· US could see pick-up in demand for Group II base oils from Europe if that market continues transition to using more of the premium-grade supplies.· US base oils exports to Europe fell in 2023 partly because of rise in regional production..· Any further rise in Europe’s demand for Group II base oils could require more supplies from overseas until regional production capacity rises..· Europe’s base oils demand could improve earlier than usual next year, reflecting blenders’ low stocks and signs that contraction in lube demand is slowing.· Europe’s lube demand faces seasonal slowdown at year-end. But pace of contraction from year earlier shows signs of slowing.· Europe’s lube demand faces prospect of stronger rise in Q1 2024 from Q4 2023 compared with Q1 2023 from Q4 2022..· Steadier-to-firmer demand could support earlier pick-up in blenders’ requirements to replenish low base oils stocks.· Europe’s Group III price premium to Group II prices falls to narrowest in more than a year.· Europe’s Group III price premium to Group I prices holds at narrowest in more than a year.· Trend could incentivize blenders to use more Group III base oils instead of Group I and Group II.· Europe’s Group I heavy-neutrals demand could get boost amid widening SN 500 discount to Group II heavy-grade prices..· Italy’s October lube demand rises for fifth month as higher consumption of industry-related oils outweighs weaker consumption of passenger-car engine oils..· Rising industrial oils consumption and weaker PCMO demand contrasts with year to mid-2023, when roles were reversed.· Trend points to slowdown in services sector, steadier activity in industrial sector.· Italy’s firmer demand extends growing contrast between reviving consumption in Mediterranean region and still-weak demand in northern Europe.· Trend curbs slowdown in Europe’s lube demand over past year, points to steadier consumption over coming months..· Germany’s lube demand extends steep slide in Sept 2023.· Sustained fall in demand in Europe’s largest market could push back timing and strength of any recovery in region’s lube consumption.· Fall in Germany’s domestic lube demand exceeds pace of fall in its lube exports for third time in four months..· Trend points to stronger lube demand in regional markets than in Germany’s domestic market..· Global base oils exports to Egypt fall in Q3 2023 to lowest in more than four years..· Slowdown in shipments points to weaker base oils and lube consumption in the country.· Ongoing pause in shipments from Asia to Egypt highlight Asia’s more balanced supply and the less attractive arbitrage to Europe and North Africa..Asia base oils - week of Dec 4: Demand outlook.Global base oils - week of Dec 4: Price outlook - margins.Global base oils - week of Dec 4: Price outlook - arbitrage.Global base oils - week of Dec 4: Demand outlook