· Global base oils prices stay more mixed versus feedstock/gasoil prices.· Falling US export price premium to VGO points to weak supply-demand fundamentals, adds to incentive for refiners to adjust output accordingly.· Europe’s Group I base oils premium to VGO holds steadier, contrasts with lower premium-grade premium to VGO.· Dynamic suggests Group I fundamentals are more balanced than premium-grade fundamentals..· FOB Asia base oils prices hold firm in narrower range vs gasoil, especially for heavy grades..· FOB Asia Group I brightstock premium to Singapore gasoil holds firm, close to highest since Q4 2021.· Sustained price strength points to ongoing supply-tightness despite incentivize for refiners to raise output.· FOB NE Asia Group II heavy-grade premium to gasoil stays unusually firm, pointing to still-tight supply-demand fundamentals.· Firm premium incentivizes refiners to raise heavy-grade output even after restart of Group II unit following maintenance work, and with seasonal slowdown in demand..· China’s domestic Group II price premium to Shandong diesel prices holds firm, stays in narrow range since start of Q2 2024..· Steady premium contrasts with sharp fall in domestic Group II price premium from around mid-November to year-end in 2022 and 2023, at a time of year when demand faced seasonal slowdown.· Prospect of lower Group II base oils output in China in coming weeks could cushion impact of seasonal slowdown in demand..· India’s Group II N70 premium to Singapore gasoil edges up, holds in narrow range since late-Sept 2024..· N70 premium stays well below year-earlier levels, when the premium then slid steadily through to early 2024.· Steadier N70 premium at lower level this time could incentivize overseas refiners to continue to direct very light grades into base oils market but deter them from raising output any further.· Any such trend could sustain N70 premium in narrower range..· Europe’s Group I base oils values hold steady and relatively firm vs VGO.· Firm price differentials contrast with weaker Group II light-grade premium and even sharper drop in Group III 4cSt premium to VGO in recent weeks..· Differing price differentials point to more balanced Group I supply-demand fundamentals compared with premium grades and especially compared with Group III base oils.· Narrowing gap between Group II and Group III differentials could support firmer demand for Group III supplies..· US Group II export price premium to VGO holds at lowest level since mid-May 2024, stays well below year-earlier levels..· US Group II domestic price premium to VGO falls more slowly, stays at more elevated level..· Still-high domestic price premium incentivizes refiners to maintain high base oils output despite seasonal slowdown in demand.· Growing importance of export market for large share of refiners’ supply boosts importance of responding more to export price signals..Asia base oils demand outlook: Week of 18 Nov.Asia base oils supply outlook: Week of 18 Nov
· Global base oils prices stay more mixed versus feedstock/gasoil prices.· Falling US export price premium to VGO points to weak supply-demand fundamentals, adds to incentive for refiners to adjust output accordingly.· Europe’s Group I base oils premium to VGO holds steadier, contrasts with lower premium-grade premium to VGO.· Dynamic suggests Group I fundamentals are more balanced than premium-grade fundamentals..· FOB Asia base oils prices hold firm in narrower range vs gasoil, especially for heavy grades..· FOB Asia Group I brightstock premium to Singapore gasoil holds firm, close to highest since Q4 2021.· Sustained price strength points to ongoing supply-tightness despite incentivize for refiners to raise output.· FOB NE Asia Group II heavy-grade premium to gasoil stays unusually firm, pointing to still-tight supply-demand fundamentals.· Firm premium incentivizes refiners to raise heavy-grade output even after restart of Group II unit following maintenance work, and with seasonal slowdown in demand..· China’s domestic Group II price premium to Shandong diesel prices holds firm, stays in narrow range since start of Q2 2024..· Steady premium contrasts with sharp fall in domestic Group II price premium from around mid-November to year-end in 2022 and 2023, at a time of year when demand faced seasonal slowdown.· Prospect of lower Group II base oils output in China in coming weeks could cushion impact of seasonal slowdown in demand..· India’s Group II N70 premium to Singapore gasoil edges up, holds in narrow range since late-Sept 2024..· N70 premium stays well below year-earlier levels, when the premium then slid steadily through to early 2024.· Steadier N70 premium at lower level this time could incentivize overseas refiners to continue to direct very light grades into base oils market but deter them from raising output any further.· Any such trend could sustain N70 premium in narrower range..· Europe’s Group I base oils values hold steady and relatively firm vs VGO.· Firm price differentials contrast with weaker Group II light-grade premium and even sharper drop in Group III 4cSt premium to VGO in recent weeks..· Differing price differentials point to more balanced Group I supply-demand fundamentals compared with premium grades and especially compared with Group III base oils.· Narrowing gap between Group II and Group III differentials could support firmer demand for Group III supplies..· US Group II export price premium to VGO holds at lowest level since mid-May 2024, stays well below year-earlier levels..· US Group II domestic price premium to VGO falls more slowly, stays at more elevated level..· Still-high domestic price premium incentivizes refiners to maintain high base oils output despite seasonal slowdown in demand.· Growing importance of export market for large share of refiners’ supply boosts importance of responding more to export price signals..Asia base oils demand outlook: Week of 18 Nov.Asia base oils supply outlook: Week of 18 Nov
