In today’s briefing:
- CX Daily: How the Yuan is Taking Over the Dollar’s Role in Global Trade
- Fed: Politics Vs Fundamentals
- Americas/EMEA base oils demand outlook: Week of 8 September
- Asia base oils supply outlook: Week of 8 September
- Asia base oils demand outlook: Week of 8 September
- Americas/EMEA base oils supply outlook: Week of 8 September
- Global base oils arb outlook: Week of 8 September
- Global base oils margins outlook: Week of 8 September
CX Daily: How the Yuan is Taking Over the Dollar’s Role in Global Trade
- Yuan /Cover Story: How the Yuan is Taking Over the Dollar’s Role in Global Trade
- Corruption /Exclusive: Ex-CSRC Chief Yi Huiman Faces Corruption Probe Likely Linked to ICBC
- Banks /: Citi Ends UnionPay Membership Amid China Consumer Banking Retreat
Fed: Politics Vs Fundamentals
- President Trump’s current preference for rate cuts is not unconditional. Higher-order logic suggests this would not override fundamental resilience or fairly prove “TACO”.
- Political pressure is state-dependent, with the messenger mattering more than the objective truth beneath any message. Trump’s Chair will have a stronger hand.
- Brazil suffered President Lula’s pressure, but he still supported his “Golden Boy’s” turn from dovish dissent to forceful rate hikes. Fed pricing ignores the potential for change.
Americas/EMEA base oils demand outlook: Week of 8 September
- US base oils demand could ease in face of downward price-pressure and healthy availability of supply.
- Buyers that built stocks as buffer against supply-disruptions during Atlantic hurricane season could start to tap those volumes before seeking additional supplies.
- Demand could face more downward pressure if buyers are wary about exposure to further drop in prices.
Asia base oils supply outlook: Week of 8 September
- Asia’s base oils prices hold relatively firm vs Singapore gasoil even as they edge lower.
- Light-grade margins slip even amid signs of healthy regional demand.
- Premium of ex-tank Singapore Group II N150 to FOB Asia cargo price also falls to lowest Q2 2024.
Asia base oils demand outlook: Week of 8 September
- Asia’s base oils demand could be more cautious amid expectations of healthy availability of supply within the region and in other markets.
- Signs of more manageable build-up of surplus supplies in July-Aug 2025 curb pressure on refiners to make sharp price adjustments to clear volumes.
- Signs of pick-up in availability of supplies in other markets could still put pressure on regional refiners to adjust prices to stay competitive.
Americas/EMEA base oils supply outlook: Week of 8 September
- US base oils export-price premium to VGO falls close to lowest level this year.
- Price-premiums fall to bottom of relatively narrow range since late last year.
- Narrow price-range over extended period suggested that any pressure from surplus supply remained manageable during that period.
Global base oils arb outlook: Week of 8 September
- FOB Asia Group II base oils prices hold unusually firm versus US export prices so far in Q3 2025.
- Asia’s firm prices make arbitrage to move surplus supplies to Americas hard to work.
- Closed arbitrage complicates removal of surplus supplies, raising prospect of build-up of supplies in Asia-Pacific market.
Global base oils margins outlook: Week of 8 September
- Global base oils prices mostly fall versus feedstock/competing fuel prices.
- Price-differentials fall more steeply in Europe and US than in Asia, pointing to weaker supply-demand fundamentals in those markets.
- Even with lower differentials, global base oils margins hold at levels that incentivize refiners to maintain firm output.
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