In today’s briefing:
- Indonesia : Sri Mulyani’s Exit Compounds Fiscal Risks
- Broadly Slower Services PMIs
- GST Cut Lifts Outlook As Indian Tire Majors Navigate Weak Q1
- Oil futures: Crude higher as Russia disruptions offset glut concerns
- Oil futures: Crude drifts lower on supply glut fears
- Global base oils margins outlook: Week of 22 September
- Americas/EMEA base oils demand outlook: Week of 22 September
- Riksbank Cuts to 1.75%, Signals Pause
- Americas/EMEA base oils supply outlook: Week of 22 September
- Asia base oils demand outlook: Week of 22 September
Indonesia : Sri Mulyani’s Exit Compounds Fiscal Risks
- The exit of Indonesia’s veteran Finance Minister, Sri Mulyani Indrawati, marks a turning point in the country’s fiscal regime.
- With her out of the picture, it is only a matter of time before the government revises the 3% deficit ceiling higher to accommodate Prabowo’s large spending plans.
- This is a slippery slope and an indiscriminate push for spending, without concomitant tax reforms, could put debt on an unsustainable path.
Broadly Slower Services PMIs
- PMIs broadly disappointed and declined relative to August, but absolute levels mostly remain robust or at least expansionary. We are not concerned by these noisy moves.
- Such broad slowing seems shocking relative to the past few months, but it is historically a regular occurrence. Five of the previous twelve were at least as broadly bad.
- The labour market remains tight in the euro area, softened in the UK, and steady in the US. Slower activity does not mean disinflationary slack. We stay relatively hawkish.
GST Cut Lifts Outlook As Indian Tire Majors Navigate Weak Q1
- Tire makers see profit pressure despite revenue gains
- JK Tyre eyes double-digit growth, expands global footprint
- CEAT eyes expanding Chennai plant at US$51 million spend
Oil futures: Crude higher as Russia disruptions offset glut concerns
- Crude oil futures were climbing higher on Tuesday as concerns about oversupply vied with geopolitical uncertainty to set the tone for the early part of the week.
- Front-month Nov25 ICE Brent futures were trading at $67.91/b (2017 BST) versus Monday’s settle of $66.57/b, while Nov25 NYMEX WTI was at $63.71/b against a previous close of $62.28/b.
- Benchmarks had opened the session lower, but geopolitical tensions continue to keep markets on edge amid ongoing strikes on Russian energy infrastructure, while Russian military activity close to the Polish border has raised wider tensions.
Oil futures: Crude drifts lower on supply glut fears
- Crude oil futures were slightly lower on Tuesday as concerns about oversupply vied with geopolitical uncertainty to set the tone for the early week.
- Front-month Nov25 ICE Brent futures were trading at $66.37/b (0850 BST) versus Monday’s settle of $66.57/b, while Nov25 NYMEX WTI was at $62.10/b against a previous close of $62.28/b.
- Markets have been unable to shake off fears of a looming supply glut, with the International Energy Agency (IEA) setting off alarm bells last month with its forecast of a 2.5 million bpd Q4 surplus rising to over 3 million bpd next year, with OPEC+ seemingly on course to add more 2.5 million bpd by the end of this year.
Global base oils margins outlook: Week of 22 September
- Global base oils margins mostly hold at levels that sustain incentive for refiners to maintain high output.
- Incentive for refiners to maintain high output puts pressure on global demand to remain sufficiently firm to absorb steady-to-higher supply.
- Pressure on demand to hold firm coincides with time of year when demand typically starts to ease.
Americas/EMEA base oils demand outlook: Week of 22 September
- US base oils demand likely to stay more muted.
- Seasonal slowdown in demand in Q4 2025 incentivizes blenders to cut current stock levels.
- Unexpectedly quiet Atlantic hurricane-season so far this year incentivizes blenders to start working down inventories that were built up to cover against supply-disruptions.
Riksbank Cuts to 1.75%, Signals Pause
- Surprise rate cut to 1.75% reflects weak growth trumping temporary inflation concerns; policy likely on hold “for some time”.
- Fiscal stimulus of SEK 80bn for 2026 supports the outlook but creates inflation uncertainty via supply-demand imbalance.
- The projected terminal rate is now reached, with the next move potentially a rate hike before the end of 2026.
This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only.
Americas/EMEA base oils supply outlook: Week of 22 September
- US base oils prices hold in narrow range versus feedstock prices.
- Steady Group II margins contrast with sharper fall in margins in H2 Sept 2024.
- Steady Group II margins sustain incentive for refiners to maintain high output levels.
Asia base oils demand outlook: Week of 22 September
- Asia’s base oils demand could turn more cautious amid signs of healthy availability and unusual change in trade flows.
- Limited build-up of surplus supplies so far in Q3 2025 had eased concern about price-volatility, supporting steadier demand.
- Buyers could instead limit their procurement plans amid unusual surge in Singapore’s base oils exports to southeast Asia in recent weeks.
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