· Crude oil prices hold close to highest levels since Q4 2023 on expectation of tighter-than-expected supply over coming months.· Diesel premium to crude oil holds close to lowest since start of 2024, suggesting the recent rise in prices is driven by more crude oil than by motor fuels.· Higher feedstock costs coincide with typical seasonal rise in base oils demand in US and Europe.· Expectations of sufficient supply incentivize buyers to maintain lower stocks, limiting producers’ leverage to target higher prices.· Asia’s base oils demand faces prospect of seasonal slowdown at start of second quarter of the year.· Region's demand shows signs of staying focused on certain products like heavy neutrals and Group I bright stock.· India’s base oils demand could stay firmer than usual amid signs of drop in supplies from more regular sources.· Discount of Europe’s Group I export prices to domestic prices narrows sharply.· Narrower discount points to tighter surplus supply.· Europe blenders’ preference to maintain low stocks cuts exposure to persistent demand weakness in some regions.· Preference to maintain low stocks leaves them exposed to tighter-than-expected availability if demand improves or supply tightens more than expected. · Demand faces prospect of seasonal pick-up in coming weeks.· Discount of US domestic spot prices to posted prices widens.· Discount of US export prices to domestic prices stays unusually wide.· Steep price discounts support expectations of sufficient supply, curbing urgency to build larger stocks.· Steep price discounts could dull pressure on blenders to speed up procurement plans following rise in posted prices..Global base oils margins outlook: Week of March 25.Global base oils arb outlook: Week of March 25
· Crude oil prices hold close to highest levels since Q4 2023 on expectation of tighter-than-expected supply over coming months.· Diesel premium to crude oil holds close to lowest since start of 2024, suggesting the recent rise in prices is driven by more crude oil than by motor fuels.· Higher feedstock costs coincide with typical seasonal rise in base oils demand in US and Europe.· Expectations of sufficient supply incentivize buyers to maintain lower stocks, limiting producers’ leverage to target higher prices.· Asia’s base oils demand faces prospect of seasonal slowdown at start of second quarter of the year.· Region's demand shows signs of staying focused on certain products like heavy neutrals and Group I bright stock.· India’s base oils demand could stay firmer than usual amid signs of drop in supplies from more regular sources.· Discount of Europe’s Group I export prices to domestic prices narrows sharply.· Narrower discount points to tighter surplus supply.· Europe blenders’ preference to maintain low stocks cuts exposure to persistent demand weakness in some regions.· Preference to maintain low stocks leaves them exposed to tighter-than-expected availability if demand improves or supply tightens more than expected. · Demand faces prospect of seasonal pick-up in coming weeks.· Discount of US domestic spot prices to posted prices widens.· Discount of US export prices to domestic prices stays unusually wide.· Steep price discounts support expectations of sufficient supply, curbing urgency to build larger stocks.· Steep price discounts could dull pressure on blenders to speed up procurement plans following rise in posted prices..Global base oils margins outlook: Week of March 25.Global base oils arb outlook: Week of March 25