· Crude prices fall over past week as prospect of even higher interest rates and stronger US dollar counter expectations of rising crude oil consumption.· IEA raises 2023 global crude oil demand forecast again; China accounts for almost half the rise in demand.· IEA projects crude supply could lag demand in 2H 2023.· US central bank set to keep raising interest rates and keep interest rates higher for longer as strong January US retail sales/jobs data and rising producer prices reflect still-resilient economic growth.· Lube blenders globally remain cautious about restocking at time of year when stock-replenishment typically starts to gather pace.· US gasoline demand falls last week for 46th straight week..· Latin Americas lube demand holds firm through Q4 2022 – leaving base oils supply more balanced at start of 2023.· Latin Americas base oils demand likely to hold steady in early 2023 after slowdown in shipments from US to region in Q4 2022..· Firm Latam demand would contrast with weak European lube demand, likely to attract more arbitrage shipments if availability builds in other regions.· Europe’s lube demand shows signs of falling more sharply than usual at end-2022.· Weak European demand magnifies impact of surplus regional supply in recent weeks even with lower total supply.· A pick-up in European demand would reflect more accurately current state of base oils supply.· Asia-Pacific demand likely to be firmer in China, steady in other regions.· Weaker Chinese demand in January prompts more regional supplies to move to other markets instead..· Demand in southeast Asia could slow down over coming weeks after blenders replenish stocks with large volumes from South Korea and Taiwan in January.· Strength and sustainability of Chinese demand over coming weeks likely to be major factor determining regional supply-demand balance as southeast Asian demand pauses.· If Chinese demand lags expectations, Asia-Pacific region could start to see reappearance of surplus supplies.· Chinese demand shows signs of rising in February.· Chinese blenders’ preference to hold off building stocks until after lunar new year holidays reflects ongoing caution about outlook.· Chinese blenders’ preference to hold off building stocks until after lunar new year holidays cuts time available to lock in supplies before seasonal pick-up in demand.· Chinese blenders would be replenishing stocks from low level following sustained slump in domestic base oils production and imports.· China’s car sales in 1H February rise strongly year on year, expected to see gradual recovery.· Indian buyers face more competition from China for Asia-Pacific supplies amid narrower price-gap between India and China prices since late last year.· India’s January base oils imports rise from December but stay low, leaving domestic output to cover growing share of domestic requirements.· India takes delivery of arbitrage cargo from US in January. Flow of additional shipments from US to India likely to be much lower than in 1H 2022..· India’s imports of very light-grade base oils rise in January. Firmer demand coincides with wider retail diesel premium to regional base oils prices.· India’s retail diesel premium to regional base oils prices remains relatively wide..Global base oils - week of Feb 13: Supply outlook
· Crude prices fall over past week as prospect of even higher interest rates and stronger US dollar counter expectations of rising crude oil consumption.· IEA raises 2023 global crude oil demand forecast again; China accounts for almost half the rise in demand.· IEA projects crude supply could lag demand in 2H 2023.· US central bank set to keep raising interest rates and keep interest rates higher for longer as strong January US retail sales/jobs data and rising producer prices reflect still-resilient economic growth.· Lube blenders globally remain cautious about restocking at time of year when stock-replenishment typically starts to gather pace.· US gasoline demand falls last week for 46th straight week..· Latin Americas lube demand holds firm through Q4 2022 – leaving base oils supply more balanced at start of 2023.· Latin Americas base oils demand likely to hold steady in early 2023 after slowdown in shipments from US to region in Q4 2022..· Firm Latam demand would contrast with weak European lube demand, likely to attract more arbitrage shipments if availability builds in other regions.· Europe’s lube demand shows signs of falling more sharply than usual at end-2022.· Weak European demand magnifies impact of surplus regional supply in recent weeks even with lower total supply.· A pick-up in European demand would reflect more accurately current state of base oils supply.· Asia-Pacific demand likely to be firmer in China, steady in other regions.· Weaker Chinese demand in January prompts more regional supplies to move to other markets instead..· Demand in southeast Asia could slow down over coming weeks after blenders replenish stocks with large volumes from South Korea and Taiwan in January.· Strength and sustainability of Chinese demand over coming weeks likely to be major factor determining regional supply-demand balance as southeast Asian demand pauses.· If Chinese demand lags expectations, Asia-Pacific region could start to see reappearance of surplus supplies.· Chinese demand shows signs of rising in February.· Chinese blenders’ preference to hold off building stocks until after lunar new year holidays reflects ongoing caution about outlook.· Chinese blenders’ preference to hold off building stocks until after lunar new year holidays cuts time available to lock in supplies before seasonal pick-up in demand.· Chinese blenders would be replenishing stocks from low level following sustained slump in domestic base oils production and imports.· China’s car sales in 1H February rise strongly year on year, expected to see gradual recovery.· Indian buyers face more competition from China for Asia-Pacific supplies amid narrower price-gap between India and China prices since late last year.· India’s January base oils imports rise from December but stay low, leaving domestic output to cover growing share of domestic requirements.· India takes delivery of arbitrage cargo from US in January. Flow of additional shipments from US to India likely to be much lower than in 1H 2022..· India’s imports of very light-grade base oils rise in January. Firmer demand coincides with wider retail diesel premium to regional base oils prices.· India’s retail diesel premium to regional base oils prices remains relatively wide..Global base oils - week of Feb 13: Supply outlook
