· Global base oils prices fall relative to feedstock/competing fuel prices as crude prices rebound.· Supply-demand fundamentals remain unchanged for now despite sudden volatility of base oils margins. · Margins volatility could prompt buyers and sellers to hold back until direction of prices and margins is clearer.· Firm base oils margins until end-Sept 2024 in most markets cushions for now impact of this month’s rise in crude oil and diesel prices.· Any further pressure on base oils margins would coincide with seasonal slowdown in demand, could add to incentive for refiners to adjust output accordingly.· FOB Asia base oils price premium to Singapore gasoil stays relatively firm even as it faces more downward pressure..· Still-firm base oils values highlight strength of base oils premium in recent months.· Firm base oils margins point to balanced-to-tight fundamentals in recent months.· Any extension of those firm fundamentals would provide leverage for refiners to adjust prices if margins face further downward pressure.· Any signs of weaker fundamentals would curb that leverage..· China’s domestic Group II light/heavy-grade premium to Shandong diesel price holds firm even as it falls from highest in more than a year at end-Sept 2024..· Sustained strength of China’s base oils margins points to more balanced fundamentals, incentivizes refiners to maintain or raise output..· CFR India Group II N70 premium to Singapore gasoil price faces additional downward pressure to lowest level since start of Q3 2024..· Any additional drop in N70 premium could leave it lagging year-earlier levels.· Any additional drop in N70 premium could leave it moving closer to levels that make less attractive the arbitrage to move shipments of very-light grade base oils to India..· Europe’s base oils price premium to VGO likely to face further downward pressure.· Any further slide in domestic Group I price premium to VGO would follow sharp drop in premium in H2 Sept 2024 after fall in outright price..· Europe Group II premium to VGO would remain relatively firm even with further drop in price differential vs VGO..· US Group II light-grade export price premium to heating oil/VGO trends sharply lower since early-Sept 2024..· US Group II light-grade export price-premium remains above price premium throughout most of year to mid-2024.· Still-firm light-grade premium sustains incentive for refiners to maintain or raise output of the product..Asia base oils demand outlook: Week of 7 Oct.Asia base oils supply outlook: Week of 7 Oct
· Global base oils prices fall relative to feedstock/competing fuel prices as crude prices rebound.· Supply-demand fundamentals remain unchanged for now despite sudden volatility of base oils margins. · Margins volatility could prompt buyers and sellers to hold back until direction of prices and margins is clearer.· Firm base oils margins until end-Sept 2024 in most markets cushions for now impact of this month’s rise in crude oil and diesel prices.· Any further pressure on base oils margins would coincide with seasonal slowdown in demand, could add to incentive for refiners to adjust output accordingly.· FOB Asia base oils price premium to Singapore gasoil stays relatively firm even as it faces more downward pressure..· Still-firm base oils values highlight strength of base oils premium in recent months.· Firm base oils margins point to balanced-to-tight fundamentals in recent months.· Any extension of those firm fundamentals would provide leverage for refiners to adjust prices if margins face further downward pressure.· Any signs of weaker fundamentals would curb that leverage..· China’s domestic Group II light/heavy-grade premium to Shandong diesel price holds firm even as it falls from highest in more than a year at end-Sept 2024..· Sustained strength of China’s base oils margins points to more balanced fundamentals, incentivizes refiners to maintain or raise output..· CFR India Group II N70 premium to Singapore gasoil price faces additional downward pressure to lowest level since start of Q3 2024..· Any additional drop in N70 premium could leave it lagging year-earlier levels.· Any additional drop in N70 premium could leave it moving closer to levels that make less attractive the arbitrage to move shipments of very-light grade base oils to India..· Europe’s base oils price premium to VGO likely to face further downward pressure.· Any further slide in domestic Group I price premium to VGO would follow sharp drop in premium in H2 Sept 2024 after fall in outright price..· Europe Group II premium to VGO would remain relatively firm even with further drop in price differential vs VGO..· US Group II light-grade export price premium to heating oil/VGO trends sharply lower since early-Sept 2024..· US Group II light-grade export price-premium remains above price premium throughout most of year to mid-2024.· Still-firm light-grade premium sustains incentive for refiners to maintain or raise output of the product..Asia base oils demand outlook: Week of 7 Oct.Asia base oils supply outlook: Week of 7 Oct