· Crude oil prices fall, returning closer to mid-point of $77-83/bl range that prices have held in since mid-Dec 2023.· Crude oil prices face support from possibility of supply disruptions, pressure from signs that fall in US interest rates will be later than previously expected.· Diesel premium to crude oil prices reverts to level it has held around for last four months, after spiking in early Feb 2024.· Global base oils demand typically starts to get a seasonal boost around this time of year.· Expectations of plentiful base oils supply or weaker-than-usual demand could incentivize blenders to maintain lower-than-usual inventories.· Asia’s base oils demand likely to get support from pick-up in activity in China after lunar new year holidays.· China’s base oils demand shows signs of holding firm, and market staying relatively balanced.· India’s base oils demand could remain more muted unless prices are at competitive levels.· Europe’s demand shows signs of staying muted, with buyers comfortable to maintain low stocks.· Rise in US posted prices often triggers pick-up in demand as buyers move to lock in more supplies before higher prices come into effect.· US buyers face prospect of deciding whether last week’s posted-price announcement by several refiners were outliers or were a precursor to additional announcements by other refiners.· Basis for last week’s posted price announcements could reflect specific refiners’ situation.· Timing of posted price announcement coincides with typical start of seasonal pick-up in demand.· Overseas buyers of US supplies could face incentive to lock in supplies now to cover against possibility of higher prices or tighter supply.· Any signs of more US refiners announcing plans to raise posted prices could add to that incentive.· Any lack of moves by other refiners to raise posted prices would curb any such incentive..· Weak domestic demand in US at end-2023 contrasted with firmer consumption in Asia and signs of stabilising consumption in Europe..· Mixed demand coincided with lower base oils supply in Asia and Europe and signs of steady supply in Americas market..· Larger disconnect between supply and demand triggered surge in exports from US at end-2023.· Ongoing wave of US arbitrage shipments point to extension of that disconnect into first few months of this year..Global base oils margins outlook: Week of Feb 26.Global base oils arb outlook: Week of Feb 26
· Crude oil prices fall, returning closer to mid-point of $77-83/bl range that prices have held in since mid-Dec 2023.· Crude oil prices face support from possibility of supply disruptions, pressure from signs that fall in US interest rates will be later than previously expected.· Diesel premium to crude oil prices reverts to level it has held around for last four months, after spiking in early Feb 2024.· Global base oils demand typically starts to get a seasonal boost around this time of year.· Expectations of plentiful base oils supply or weaker-than-usual demand could incentivize blenders to maintain lower-than-usual inventories.· Asia’s base oils demand likely to get support from pick-up in activity in China after lunar new year holidays.· China’s base oils demand shows signs of holding firm, and market staying relatively balanced.· India’s base oils demand could remain more muted unless prices are at competitive levels.· Europe’s demand shows signs of staying muted, with buyers comfortable to maintain low stocks.· Rise in US posted prices often triggers pick-up in demand as buyers move to lock in more supplies before higher prices come into effect.· US buyers face prospect of deciding whether last week’s posted-price announcement by several refiners were outliers or were a precursor to additional announcements by other refiners.· Basis for last week’s posted price announcements could reflect specific refiners’ situation.· Timing of posted price announcement coincides with typical start of seasonal pick-up in demand.· Overseas buyers of US supplies could face incentive to lock in supplies now to cover against possibility of higher prices or tighter supply.· Any signs of more US refiners announcing plans to raise posted prices could add to that incentive.· Any lack of moves by other refiners to raise posted prices would curb any such incentive..· Weak domestic demand in US at end-2023 contrasted with firmer consumption in Asia and signs of stabilising consumption in Europe..· Mixed demand coincided with lower base oils supply in Asia and Europe and signs of steady supply in Americas market..· Larger disconnect between supply and demand triggered surge in exports from US at end-2023.· Ongoing wave of US arbitrage shipments point to extension of that disconnect into first few months of this year..Global base oils margins outlook: Week of Feb 26.Global base oils arb outlook: Week of Feb 26