· Base oils prices face growing pressure from feedstock/competing fuel prices after crude oil prices rise to highest in more than four months.· Refiners face more pressure to raise prices to limit downward pressure on margins, especially in US and Europe.· Fob Asia Group I base oils prices hold firm relative to regional gasoil prices, maintaining similar or higher levels than in recent months.· Fob Asia Group I base oils price premium to gasoil maintains similar levels to March 2023, after the premium rebounded from much lower levels earlier that year..· Firm premium incentivizes Group I refiners to maintain or increase base oils output.· Fob Asia Group II base oil price premium to gasoil prices holds firm after recovering from dip in first few weeks of 2024.· Fob Asia Group II base oil premium to gasoil lags year-earlier levels, when margins surged through to early May 2023.· Lagging premium curbs incentive for refiners to maximise output..· Domestic Chinese Group II light-grade premium to Shandong diesel prices extends slide to three-month low..· Falling premium contrasts with surge in Group II premium in first four months of 2023.· Lower premium cuts incentive for domestic refiners to raise output at a time of year when domestic demand typically rises..· CFR India N70 premium to Asia gasoil prices holds steady at levels that sustain incentive for overseas refiners to maintain production levels but that increasingly lag year-earlier levels..· Europe’s Group I base oil price premium to feedstock/competing fuel prices holds in narrow range, up from lows in early Feb 2024, down from year-earlier levels, curbing incentive to boost output.· Europe’s Group II base oil premium to VGO holds steady, well below highs in Jan 2024 and down from year-earlier levels..· Premium stays lower even with ongoing Group II plant maintenance in Europe.· Europe’s Group III 4cst (low) premium to VGO steadies in recent weeks close to lowest since Q2 2022..· US Group II light/heavy-grade export prices fall to steeper discount to heating oil prices.· US Group II light-grade export price premium to VGO holds close to lowest since early 2020; heavy-grade premium holds close to lowest since July 2020.· US Group II light-grade domestic price premium to VGO holds close to lowest since Q1 2022; heavy-grade premium holds close to lowest since Q2 2022.· Weak base oil premiums incentivize refiners to trim run-rates or raise prices.· US Group II light-grade posted price premium to VGO down more than $80/t since early December, even with steady posted prices in interim..· Light-grade posted price premium to VGO holds well below average levels in 2023, adding to pressure on margins.· Last week’s rise in crude oil prices adds to pressure on margins and on US refiners to raise posted prices..Global base oils demand outlook: Week of March 11
· Base oils prices face growing pressure from feedstock/competing fuel prices after crude oil prices rise to highest in more than four months.· Refiners face more pressure to raise prices to limit downward pressure on margins, especially in US and Europe.· Fob Asia Group I base oils prices hold firm relative to regional gasoil prices, maintaining similar or higher levels than in recent months.· Fob Asia Group I base oils price premium to gasoil maintains similar levels to March 2023, after the premium rebounded from much lower levels earlier that year..· Firm premium incentivizes Group I refiners to maintain or increase base oils output.· Fob Asia Group II base oil price premium to gasoil prices holds firm after recovering from dip in first few weeks of 2024.· Fob Asia Group II base oil premium to gasoil lags year-earlier levels, when margins surged through to early May 2023.· Lagging premium curbs incentive for refiners to maximise output..· Domestic Chinese Group II light-grade premium to Shandong diesel prices extends slide to three-month low..· Falling premium contrasts with surge in Group II premium in first four months of 2023.· Lower premium cuts incentive for domestic refiners to raise output at a time of year when domestic demand typically rises..· CFR India N70 premium to Asia gasoil prices holds steady at levels that sustain incentive for overseas refiners to maintain production levels but that increasingly lag year-earlier levels..· Europe’s Group I base oil price premium to feedstock/competing fuel prices holds in narrow range, up from lows in early Feb 2024, down from year-earlier levels, curbing incentive to boost output.· Europe’s Group II base oil premium to VGO holds steady, well below highs in Jan 2024 and down from year-earlier levels..· Premium stays lower even with ongoing Group II plant maintenance in Europe.· Europe’s Group III 4cst (low) premium to VGO steadies in recent weeks close to lowest since Q2 2022..· US Group II light/heavy-grade export prices fall to steeper discount to heating oil prices.· US Group II light-grade export price premium to VGO holds close to lowest since early 2020; heavy-grade premium holds close to lowest since July 2020.· US Group II light-grade domestic price premium to VGO holds close to lowest since Q1 2022; heavy-grade premium holds close to lowest since Q2 2022.· Weak base oil premiums incentivize refiners to trim run-rates or raise prices.· US Group II light-grade posted price premium to VGO down more than $80/t since early December, even with steady posted prices in interim..· Light-grade posted price premium to VGO holds well below average levels in 2023, adding to pressure on margins.· Last week’s rise in crude oil prices adds to pressure on margins and on US refiners to raise posted prices..Global base oils demand outlook: Week of March 11
