· Global base oils prices extend slide versus gasoil, boosting incentive for refiners to focus on maximising diesel production.· Global base oils prices fall less sharply versus feedstock prices, supporting relatively firm margins.· Trend reflects strength of diesel prices relative to crude, highlighting the benefit of comparing competing and feedstock prices to maximise refining margins.· Squeezed base oil prices versus diesel raises prospect of lower refinery run-rates / fall in base oils supply.· Fob Asia light-grade base oils prices maintain steep discount to gasoil, especially for Group I prices, ICIS data shows..· Only fob Asia Group I bright stock prices maintain premium to gasoil, with premium close to lowest in a year..· Domestic China Group II light-grade price premium to Shandong diesel prices stays close to weakest level since end-2022..· Weak domestic base oil premium to diesel contrasts with firm diesel premium to crude, incentivizing refiners to extend base oil run-cuts/shutdowns..· Europe Group I light-grade export prices fall to widening discount to gasoil prices.· Europe base oil prices fall less sharply versus VGO, reflecting strength of diesel prices..· US base oils prices similarly fall more steeply versus diesel than versus VGO.· US Group II light-grade export prices hold at steep discount to heating oil.· US domestic Group II light-grade price premium to VGO still falls to lowest since Q1 2022..Global base oils - week of Aug 21: Demand outlook
· Global base oils prices extend slide versus gasoil, boosting incentive for refiners to focus on maximising diesel production.· Global base oils prices fall less sharply versus feedstock prices, supporting relatively firm margins.· Trend reflects strength of diesel prices relative to crude, highlighting the benefit of comparing competing and feedstock prices to maximise refining margins.· Squeezed base oil prices versus diesel raises prospect of lower refinery run-rates / fall in base oils supply.· Fob Asia light-grade base oils prices maintain steep discount to gasoil, especially for Group I prices, ICIS data shows..· Only fob Asia Group I bright stock prices maintain premium to gasoil, with premium close to lowest in a year..· Domestic China Group II light-grade price premium to Shandong diesel prices stays close to weakest level since end-2022..· Weak domestic base oil premium to diesel contrasts with firm diesel premium to crude, incentivizing refiners to extend base oil run-cuts/shutdowns..· Europe Group I light-grade export prices fall to widening discount to gasoil prices.· Europe base oil prices fall less sharply versus VGO, reflecting strength of diesel prices..· US base oils prices similarly fall more steeply versus diesel than versus VGO.· US Group II light-grade export prices hold at steep discount to heating oil.· US domestic Group II light-grade price premium to VGO still falls to lowest since Q1 2022..Global base oils - week of Aug 21: Demand outlook