· Global base oils prices hold steadier versus feedstock/competing fuel prices following recent dip in margins, especially in Asia.· Base oils margins remain relatively firm even after recent rise in crude prices since early June, especially for US Group II and Europe Group I supplies, and for Asia Group II heavy grades.· Relatively firm margins likely to incentivize refiners to maintain or raise output.· FOB NE Asia Group II base oils price premium to regional gasoil prices edges up, halting sharp slide over past month.· Group II heavy-grade premium especially remains much higher than year-earlier levels..· Firmer premiums could incentivize refiners to maintain output, especially of heavy grades.· FOB Asia Group I base oils premium to regional gasoil prices stays relatively firm even after falling over past month, and stays well above year-earlier levels.· Firm Group I premiums point to more balanced supply-demand fundamentals, incentivize refiners to maintain higher output..· China’s domestic Group II N150 price premium to Shandong diesel prices holds steady, edging up slightly since early June 2024. .· Steady-to-firm premium contrasts with sharp fall in FOB NE Asia Group II premium since early June 2024.· Contrasting trends point to more balanced supply-demand fundamentals in China than in Asia..· CFR India N70 premium to Singapore gasoil price edges up after slumping over past month..· Premium stays at level that reduces attraction of moving more supplies from Asia to India unless regional refiners trim their price offers.· Any slowdown in demand or pressure on refiners to lower offers would boost their incentive to produce more diesel instead..· Europe’s Group I price premium to VGO extends recovery since end-June 2024, stays close to highest this year, especially for export prices, even after rebound in crude/VGO prices since early June..· Firm premium incentivizes refiners to maintain or raise output.· Europe’s Group II price premium to VGO recovers from two-month low in early July 2024, stays in relatively narrow range since start of the year.· Europe Group II light-grade price premium’s relatively narrow range this year contrasts with rebound in US light-grade premium to VGO since start of Q2 2024..· Like Europe, US Group II base oils premium to VGO edges down much less sharply than FOB NE Asia values over past month.· US Group II domestic light-grade premium to VGO holds firm, similar to year-earlier levels.· US Group II export light-grade premium to VGO holds firm, well above year-earlier levels..· Firmer export price-premium adds to incentive for refiners to maintain or raise output..Asia base oils demand outlook: Week of 15 July.Asia base oils supply outlook: Week of 15 July
· Global base oils prices hold steadier versus feedstock/competing fuel prices following recent dip in margins, especially in Asia.· Base oils margins remain relatively firm even after recent rise in crude prices since early June, especially for US Group II and Europe Group I supplies, and for Asia Group II heavy grades.· Relatively firm margins likely to incentivize refiners to maintain or raise output.· FOB NE Asia Group II base oils price premium to regional gasoil prices edges up, halting sharp slide over past month.· Group II heavy-grade premium especially remains much higher than year-earlier levels..· Firmer premiums could incentivize refiners to maintain output, especially of heavy grades.· FOB Asia Group I base oils premium to regional gasoil prices stays relatively firm even after falling over past month, and stays well above year-earlier levels.· Firm Group I premiums point to more balanced supply-demand fundamentals, incentivize refiners to maintain higher output..· China’s domestic Group II N150 price premium to Shandong diesel prices holds steady, edging up slightly since early June 2024. .· Steady-to-firm premium contrasts with sharp fall in FOB NE Asia Group II premium since early June 2024.· Contrasting trends point to more balanced supply-demand fundamentals in China than in Asia..· CFR India N70 premium to Singapore gasoil price edges up after slumping over past month..· Premium stays at level that reduces attraction of moving more supplies from Asia to India unless regional refiners trim their price offers.· Any slowdown in demand or pressure on refiners to lower offers would boost their incentive to produce more diesel instead..· Europe’s Group I price premium to VGO extends recovery since end-June 2024, stays close to highest this year, especially for export prices, even after rebound in crude/VGO prices since early June..· Firm premium incentivizes refiners to maintain or raise output.· Europe’s Group II price premium to VGO recovers from two-month low in early July 2024, stays in relatively narrow range since start of the year.· Europe Group II light-grade price premium’s relatively narrow range this year contrasts with rebound in US light-grade premium to VGO since start of Q2 2024..· Like Europe, US Group II base oils premium to VGO edges down much less sharply than FOB NE Asia values over past month.· US Group II domestic light-grade premium to VGO holds firm, similar to year-earlier levels.· US Group II export light-grade premium to VGO holds firm, well above year-earlier levels..· Firmer export price-premium adds to incentive for refiners to maintain or raise output..Asia base oils demand outlook: Week of 15 July.Asia base oils supply outlook: Week of 15 July