· Crude oil prices hold close to lowest since July 2023 amid expectations of weaker supply-demand fundamentals in Q1 2024.· Diesel premium to crude oil extends gradual fall to five-month low.· High interest rates likely to keep pressure on economic growth in key global markets well into 2024. · Firm base oils prices relative to feedstock/competing fuel prices add to slowdown in base oils demand as buyers hold off in anticipation of price-correction. · Demand already faces seasonal slowdown in requirements. · Asia’s base oils demand could face further pressure from expectations of rise in surplus supply.· Demand likely to hold firmer once buyers are comfortable that they face less risk of lower prices amid underlying growth in regional lube consumption.· Asia’s firm lube demand already supports steadier consumption in key global markets in Q3 2023..· Rise in base oils supplies in or moving to China point to either a pick-up in end-user demand or pick-up in stock-building.· A pick-up in stock-building could trigger subsequent slowdown in demand unless end-user consumption revives more strongly.· Europe’s base oils demand could revive earlier than usual at start of next year amid signs of more limited surplus supply and blenders’ more balanced stocks.· Europe’s firm base oils export prices relative to other grades support signs of more limited supply.· US base oils demand likely to be mixed.· Round of posted price-cuts eased buyers’ concern about exposure to lower prices.· Reversion of steep discount of US domestic spot prices to posted prices revives those concerns.· Increasingly competitive US export prices support firmer buying interest from Latin America.· Increasingly competitive US export prices boost feasibility of clearing surplus cargoes and avoiding major supply-build over coming weeks.· Expectations of more limited supply-build could support steadier domestic demand..Global base oils - week of Dec 11: Price outlook - margins.Global base oils - week of Dec 11: Price outlook - arbitrage
· Crude oil prices hold close to lowest since July 2023 amid expectations of weaker supply-demand fundamentals in Q1 2024.· Diesel premium to crude oil extends gradual fall to five-month low.· High interest rates likely to keep pressure on economic growth in key global markets well into 2024. · Firm base oils prices relative to feedstock/competing fuel prices add to slowdown in base oils demand as buyers hold off in anticipation of price-correction. · Demand already faces seasonal slowdown in requirements. · Asia’s base oils demand could face further pressure from expectations of rise in surplus supply.· Demand likely to hold firmer once buyers are comfortable that they face less risk of lower prices amid underlying growth in regional lube consumption.· Asia’s firm lube demand already supports steadier consumption in key global markets in Q3 2023..· Rise in base oils supplies in or moving to China point to either a pick-up in end-user demand or pick-up in stock-building.· A pick-up in stock-building could trigger subsequent slowdown in demand unless end-user consumption revives more strongly.· Europe’s base oils demand could revive earlier than usual at start of next year amid signs of more limited surplus supply and blenders’ more balanced stocks.· Europe’s firm base oils export prices relative to other grades support signs of more limited supply.· US base oils demand likely to be mixed.· Round of posted price-cuts eased buyers’ concern about exposure to lower prices.· Reversion of steep discount of US domestic spot prices to posted prices revives those concerns.· Increasingly competitive US export prices support firmer buying interest from Latin America.· Increasingly competitive US export prices boost feasibility of clearing surplus cargoes and avoiding major supply-build over coming weeks.· Expectations of more limited supply-build could support steadier domestic demand..Global base oils - week of Dec 11: Price outlook - margins.Global base oils - week of Dec 11: Price outlook - arbitrage