· Europe/Asia base oils prices rise relative to diesel, steady vs crude - reflecting recent weakness of diesel.· Asia Group II premium to diesel rises to widest in two months, still low for time of year – likely to get additional support from seasonal rise in demand..· China’s domestic Group II N150 premium to Shandong diesel prices extends strong rebound to highest since end-November – incentivizing refiners to produce more base oils..· India’s domestic retail diesel premium to regional light-grade prices stays relatively wide, could start to narrow if light-grade prices rise.· Europe Group I premium to diesel rises to highest since early December to levels that likely incentivize steady production.· US Group II posted price premium to heating oil holds firm, especially for heavy grades.· Asia Group II discount to Europe prices narrows further amid tighter supply fundamentals in Asia-Pacific.· Asia Group II discount to Europe still wide – would need to narrow even further to deter shipments to outlets en route to Europe such as Mideast Gulf.· Asia Group II discount to US stays unusually wide, especially for heavy grades.· Slowdown in arbitrage shipments from Asia to Americas in Q4 2022 reflects more the tighter availability than closed arbitrage.· But Americas remains attractive option for any Asia surplus, or if Chinese demand lags expectations.· Europe Group II light-grade premium to Group I stays narrower; heavy-grade premium to Group I stays wider – boosting attraction of SN 500.· Europe Group III 4cst premium to Group I/II increases to widest in more than two months – boosting attraction of using Group I/II instead of Group III.· Asia Group I bright stock premium to SN 500 widens further amid firm fundamentals.· Asia heavy-grade premium to light grades stays narrow – likely to widen on seasonal rise in demand.· Asia Group II premium to Group I widens, but still unusually low. Widening trend likely to continue.· Domestic Chinese bright stock prices fail to keep pace with firmer fob Asia prices, complicating arbitrage.· Domestic Chinese prices would need to rise, or fob Asia prices fall, to attract more bright stock to China.· Domestic Chinese Group II light-grade prices extend premium to fob Asia prices to highest in more than two months.· Rising domestic Chinese prices from domestic producers narrow their discount to domestic prices from overseas producers – adding to attraction of overseas supplies.· Option of moving more supplies to China gives Asia Group II producers more leverage to turn down prices that they deem too low from others buyers in Asia-Pacific region..Global base oils - week of Feb 13: Demand outlook
· Europe/Asia base oils prices rise relative to diesel, steady vs crude - reflecting recent weakness of diesel.· Asia Group II premium to diesel rises to widest in two months, still low for time of year – likely to get additional support from seasonal rise in demand..· China’s domestic Group II N150 premium to Shandong diesel prices extends strong rebound to highest since end-November – incentivizing refiners to produce more base oils..· India’s domestic retail diesel premium to regional light-grade prices stays relatively wide, could start to narrow if light-grade prices rise.· Europe Group I premium to diesel rises to highest since early December to levels that likely incentivize steady production.· US Group II posted price premium to heating oil holds firm, especially for heavy grades.· Asia Group II discount to Europe prices narrows further amid tighter supply fundamentals in Asia-Pacific.· Asia Group II discount to Europe still wide – would need to narrow even further to deter shipments to outlets en route to Europe such as Mideast Gulf.· Asia Group II discount to US stays unusually wide, especially for heavy grades.· Slowdown in arbitrage shipments from Asia to Americas in Q4 2022 reflects more the tighter availability than closed arbitrage.· But Americas remains attractive option for any Asia surplus, or if Chinese demand lags expectations.· Europe Group II light-grade premium to Group I stays narrower; heavy-grade premium to Group I stays wider – boosting attraction of SN 500.· Europe Group III 4cst premium to Group I/II increases to widest in more than two months – boosting attraction of using Group I/II instead of Group III.· Asia Group I bright stock premium to SN 500 widens further amid firm fundamentals.· Asia heavy-grade premium to light grades stays narrow – likely to widen on seasonal rise in demand.· Asia Group II premium to Group I widens, but still unusually low. Widening trend likely to continue.· Domestic Chinese bright stock prices fail to keep pace with firmer fob Asia prices, complicating arbitrage.· Domestic Chinese prices would need to rise, or fob Asia prices fall, to attract more bright stock to China.· Domestic Chinese Group II light-grade prices extend premium to fob Asia prices to highest in more than two months.· Rising domestic Chinese prices from domestic producers narrow their discount to domestic prices from overseas producers – adding to attraction of overseas supplies.· Option of moving more supplies to China gives Asia Group II producers more leverage to turn down prices that they deem too low from others buyers in Asia-Pacific region..Global base oils - week of Feb 13: Demand outlook
