· Global base oils values recover versus feedstock/competing fuel prices.· Margins stay firm in all regions, especially compared with last year, and especially in US.· Firm margins imply strong supply-demand fundamentals, incentivize refiners to raise base oils output.· FOB Asia base oils prices rise vs feedstock/competing fuel prices, stay unusually firm for the time of year.· Rise in FOB Asia Group I and Group II base oils price premium contrasts with slump in premium from June-Sept 2023..· Firmer-than-usual base oils premium coincides with lower gasoil premium to crude oil compared with 2023 and especially with 2022 levels.· Firmer-than-usual base oils premium and lower gasoil premium magnifies strength of base oils premium, incentivizing refiners to maintain or raise output..· China’s domestic Group II base oils prices hold firm vs Shandong diesel prices..· Steady values contrast with sharp dip in Group II premium to diesel in Q3 2023.· Premium holds steady in Q3 2024 even with seasonal slowdown in domestic demand.· Steady premium incentivizes refiners to maintain steady or higher output levels even with slowdown in domestic demand..· CFR India Group II N70 premium to Singapore gasoil prices extends recovery to highest in a month..· Firmer premium boosts incentive to move more Group II light grades to India, cuts pressure on Asia refiners to trim price offers..· Europe’s domestic Group I base oils price premium to VGO holds close to highest in a year..· Europe’s Group I export price premium to VGO extends rise to highest since end-2022.· Premiums hold firm at a time of year when demand faces a seasonal slowdown.· Firm premium points to unusually tight supply and steady-to-firm demand, incentivizing refiners to maintain or raise output.· Firm premium raises prospect of build-up of surplus volumes if supply is less tight or demand weaker than expected.· Europe’s Group II price premium to VGO edges up close to highest since start of 2024.· Group II premium stays low vs 2021-2022 levels, stays firm vs levels before 2021..· Rise in US, Europe Group II domestic light-grade price premium to VGO outpaces higher ex-tank Singapore Group II premium to gasoil..· US Group II premium to VGO almost matches Europe Group II premium to VGO.· Trend highlights strong rebound in US Group II premium to VGO since end-Q1 2024, cuts attraction of moving more shipments to Europe.· Increasingly firm US Group II premium to VGO incentivizes refiners to maximise base oils output.· Weaker heating oil premium to crude oil adds to attraction of producing more base oils..· US Group III 4cSt premium to VGO holds in relatively narrow, firmer range after bottoming out in April 2024 at lowest since early-2021..· Premium remains well above levels before 2021..Asia base oils demand outlook: Week of 22 July.Asia base oils supply outlook: Week of 22 July
· Global base oils values recover versus feedstock/competing fuel prices.· Margins stay firm in all regions, especially compared with last year, and especially in US.· Firm margins imply strong supply-demand fundamentals, incentivize refiners to raise base oils output.· FOB Asia base oils prices rise vs feedstock/competing fuel prices, stay unusually firm for the time of year.· Rise in FOB Asia Group I and Group II base oils price premium contrasts with slump in premium from June-Sept 2023..· Firmer-than-usual base oils premium coincides with lower gasoil premium to crude oil compared with 2023 and especially with 2022 levels.· Firmer-than-usual base oils premium and lower gasoil premium magnifies strength of base oils premium, incentivizing refiners to maintain or raise output..· China’s domestic Group II base oils prices hold firm vs Shandong diesel prices..· Steady values contrast with sharp dip in Group II premium to diesel in Q3 2023.· Premium holds steady in Q3 2024 even with seasonal slowdown in domestic demand.· Steady premium incentivizes refiners to maintain steady or higher output levels even with slowdown in domestic demand..· CFR India Group II N70 premium to Singapore gasoil prices extends recovery to highest in a month..· Firmer premium boosts incentive to move more Group II light grades to India, cuts pressure on Asia refiners to trim price offers..· Europe’s domestic Group I base oils price premium to VGO holds close to highest in a year..· Europe’s Group I export price premium to VGO extends rise to highest since end-2022.· Premiums hold firm at a time of year when demand faces a seasonal slowdown.· Firm premium points to unusually tight supply and steady-to-firm demand, incentivizing refiners to maintain or raise output.· Firm premium raises prospect of build-up of surplus volumes if supply is less tight or demand weaker than expected.· Europe’s Group II price premium to VGO edges up close to highest since start of 2024.· Group II premium stays low vs 2021-2022 levels, stays firm vs levels before 2021..· Rise in US, Europe Group II domestic light-grade price premium to VGO outpaces higher ex-tank Singapore Group II premium to gasoil..· US Group II premium to VGO almost matches Europe Group II premium to VGO.· Trend highlights strong rebound in US Group II premium to VGO since end-Q1 2024, cuts attraction of moving more shipments to Europe.· Increasingly firm US Group II premium to VGO incentivizes refiners to maximise base oils output.· Weaker heating oil premium to crude oil adds to attraction of producing more base oils..· US Group III 4cSt premium to VGO holds in relatively narrow, firmer range after bottoming out in April 2024 at lowest since early-2021..· Premium remains well above levels before 2021..Asia base oils demand outlook: Week of 22 July.Asia base oils supply outlook: Week of 22 July