Global base oils – the week ahead

- Diesel holds unusually firm vs crude, incentivizes refiners to increase production of the motor fuel.

- Retail diesel prices in India extend gains in April, but remain weak relative to crude. India's retail diesel prices began rising from 22 March, after holding steady since early November.

- Base oil prices remain unusually weak relative to diesel/crude, incentivize refiners to produce more of the motor fuel.

- Base oils typically at narrower premium or at discount to diesel when supply-demand fundamentals weak. Base oils typically at larger premium to diesel when supply-demand fundamentals tight.

- Light-grade base oils face more direct pressure from high gasoil prices. But heavy-grade prices typically outperform light grades during spring and summer months.

- Heavy grades already show signs of firming versus light grades.

- Group II show signs of firming versus Group I.

- Europe Group I shows signs of firming versus Asia.

- Domestic China market increasingly lags fob Asia. Surplus Asia supplies incentivized to target other markets.