· Global base oils values stay more mixed versus feedstock/competing fuel prices; fob Asia and US domestic values hold firmer, Europe and US export prices stay under sustained pressure.· Fob Asia base oils prices rise versus regional gasoil prices, especially for heavy grades.· Fob Asia Group I bright stock premium to gasoil rises to highest since May 2023..· Fob Asia Group II heavy-grade premium to gasoil rises to highest in more than three months.· Rising base oils values, and especially heavy-grade values, point to tighter supply-demand fundamentals, incentivize refiners to boost output..· China’s domestic Group II light-grade premium to Shandong diesel edges down from eight-month high, falls further behind year-earlier levels..· Lower base oils premium vs year-earlier levels curbs incentive for domestic refiners to boost output even as demand gets a seasonal boost..· CFR India N70 premium to regional gasoil price extends recovery since early Feb 2024..· Higher premium increases incentive for regional refiners to produce more light grades, facilitates sales of the light grades..· Europe’s base oils prices stay low vs gasoil and VGO prices.· Europe’s Group I domestic light-grade premium to VGO holds close to lowest since April 2023.· Europe’s Group II domestic light-grade premium to VGO steadies well below highs of early 2024 and below 1H 2023 levels.· Europe’s Group III 4cst (low) premium to VGO holds at lowest since June 2022..· Weak or falling premiums sustain incentive for refiners to limit base oils production.· Narrower gap between Group I/II and Group III premium boosts competitiveness between the grades..· US’ Group II export prices maintain discount to heating oil, stay unusually weak vs VGO.· Weak margins incentivize refiners to cut production.· US’ Group II domestic prices stay weak vs VGO but at much steeper premiums than export prices, especially for heavy grades..· Firmer margins curb incentive to cut margins.· US Group II posted price premium to VGO stays weak vs average levels over last two years and vs Q4 2023..Global base oils demand outlook: Week of Feb 26
· Global base oils values stay more mixed versus feedstock/competing fuel prices; fob Asia and US domestic values hold firmer, Europe and US export prices stay under sustained pressure.· Fob Asia base oils prices rise versus regional gasoil prices, especially for heavy grades.· Fob Asia Group I bright stock premium to gasoil rises to highest since May 2023..· Fob Asia Group II heavy-grade premium to gasoil rises to highest in more than three months.· Rising base oils values, and especially heavy-grade values, point to tighter supply-demand fundamentals, incentivize refiners to boost output..· China’s domestic Group II light-grade premium to Shandong diesel edges down from eight-month high, falls further behind year-earlier levels..· Lower base oils premium vs year-earlier levels curbs incentive for domestic refiners to boost output even as demand gets a seasonal boost..· CFR India N70 premium to regional gasoil price extends recovery since early Feb 2024..· Higher premium increases incentive for regional refiners to produce more light grades, facilitates sales of the light grades..· Europe’s base oils prices stay low vs gasoil and VGO prices.· Europe’s Group I domestic light-grade premium to VGO holds close to lowest since April 2023.· Europe’s Group II domestic light-grade premium to VGO steadies well below highs of early 2024 and below 1H 2023 levels.· Europe’s Group III 4cst (low) premium to VGO holds at lowest since June 2022..· Weak or falling premiums sustain incentive for refiners to limit base oils production.· Narrower gap between Group I/II and Group III premium boosts competitiveness between the grades..· US’ Group II export prices maintain discount to heating oil, stay unusually weak vs VGO.· Weak margins incentivize refiners to cut production.· US’ Group II domestic prices stay weak vs VGO but at much steeper premiums than export prices, especially for heavy grades..· Firmer margins curb incentive to cut margins.· US Group II posted price premium to VGO stays weak vs average levels over last two years and vs Q4 2023..Global base oils demand outlook: Week of Feb 26
