The Lube That Greases the Economy Says Beware 2024
A small but significant part of the oil market is flashing danger signals about a slump in manufacturing.
Old advertising posters for BP Energol at the entrance to a parking garage in Soho, London.
Photographer: Mike Kemp/In Pictures via Getty Images
Draw a schematic diagram of the global economy, and one pictures a vast collection of cogs, gears, chains and pulleys — all labelled with national flags and currency signs. Bucket loads of lubricant smooth their interactions. The faster the economic wheels turn, the more grease is needed, and vice-versa.
The real economy isn’t very different to its schematic version. Essential but unnoticed, petroleum-derived lubricants are everywhere, turning the least sexy products of a barrel of oil into a key indicator of the business cycle. Right now, that niche market is signaling an ominous message about the outlook for 2024. “Demand is really just falling,” Sinead Gorman, Shell Plc’s chief financial officer, said last week about lubricants. Take the warning seriously: The British oil major is, alongside ExxonMobil Corp., the world's largest lubricant producer.