· Crude oil prices rise as Saudi Arabia announces further cut to crude oil production. Other OPEC+ members hold off cutting production any further.· Crude oil prices surged in early April following OPEC+ move to cut production, before reversing gains on concern of global economic slowdown.· That concern gathered pace in recent weeks as slower-than-expected economic growth in China compounds slowdown in Europe and expected slowdown in US.· Diesel prices maintain narrower premium to crude oil, reflecting expectations of economic slowdown.· Economic slowdown likely to compound seasonal slowdown in lube demand in Q3 2023.· Size of recent fall in base oils demand shows signs of outpacing lower lube demand in some markets.· Trend suggests blenders are comfortable holding lower inventories to cover lube production requirements.· Trend suggests demand will revive after blenders have completed round of destocking.· Demand would then likely be steadier as blenders replenish stocks more frequently.· Blenders’ strategy assumes easy access to supplies as and when required..Global base oils – week of June 5: Price outlook - margins
· Crude oil prices rise as Saudi Arabia announces further cut to crude oil production. Other OPEC+ members hold off cutting production any further.· Crude oil prices surged in early April following OPEC+ move to cut production, before reversing gains on concern of global economic slowdown.· That concern gathered pace in recent weeks as slower-than-expected economic growth in China compounds slowdown in Europe and expected slowdown in US.· Diesel prices maintain narrower premium to crude oil, reflecting expectations of economic slowdown.· Economic slowdown likely to compound seasonal slowdown in lube demand in Q3 2023.· Size of recent fall in base oils demand shows signs of outpacing lower lube demand in some markets.· Trend suggests blenders are comfortable holding lower inventories to cover lube production requirements.· Trend suggests demand will revive after blenders have completed round of destocking.· Demand would then likely be steadier as blenders replenish stocks more frequently.· Blenders’ strategy assumes easy access to supplies as and when required..Global base oils – week of June 5: Price outlook - margins
