· Europe’s Group I base oils price premium to diesel rises to highest since July 2022, implying unusually tight supply and strong demand.· Europe’s Group II base oils price premium to diesel steadies at highest since September 2022, implying tight supply and firm demand.· Firm base oil premium to diesel incentivizes refiners to produce more base oils, boosting supply to plug implied shortfall.· If supply-demand fundamentals are less strong than price premium implies, market faces prospect of rising surplus supply..· Asia-Pacific Group I price premium to diesel holds close to highest since end-2021.· Asia Group II premium holds at highest since July 2022.· Firm Asia-Pacific base oils prices versus diesel and crude incentivize Asia’s refiners to boost base oils output – cushioning impact of plant maintenance work.· Asia’s base oils producers could seek to maintain prices in response to tighter supply over coming weeks.· Asia’s buyers likely to target lower prices or cut requirements as slower demand limits urgency to secure additional volumes.· Asia’s producers have incentive to sustain steady demand over coming weeks and to cut inventories ahead of slowdown in activity during summer months..· Domestic Chinese Group II light-grade price premium to diesel prices holds in a narrow range close to recent highs.· Firm base oil premium to diesel incentivizes refiners to produce more base oils.· Prospect of seasonal slowdown in diesel consumption could add to that incentive.· Firm premium to diesel implies strong demand and tight supply.· China’s supply is likely to improve as plant maintenance work draws to a close.· Prospect of rise in supply and still-muted demand could put pressure on base oil premium to diesel..· US base oils prices maintain higher premium vs diesel than before wave of posted price-cuts in April.· Buyers’ concern that US producers would cut prices had been a factor behind weaker-than-usual demand in late Q1/early Q2 2023.· US prices’ sustained strength vs diesel could revive that concern..Global base oils - week of May 8: Price outlook - margins.Contact us for more information about the data for this story
· Europe’s Group I base oils price premium to diesel rises to highest since July 2022, implying unusually tight supply and strong demand.· Europe’s Group II base oils price premium to diesel steadies at highest since September 2022, implying tight supply and firm demand.· Firm base oil premium to diesel incentivizes refiners to produce more base oils, boosting supply to plug implied shortfall.· If supply-demand fundamentals are less strong than price premium implies, market faces prospect of rising surplus supply..· Asia-Pacific Group I price premium to diesel holds close to highest since end-2021.· Asia Group II premium holds at highest since July 2022.· Firm Asia-Pacific base oils prices versus diesel and crude incentivize Asia’s refiners to boost base oils output – cushioning impact of plant maintenance work.· Asia’s base oils producers could seek to maintain prices in response to tighter supply over coming weeks.· Asia’s buyers likely to target lower prices or cut requirements as slower demand limits urgency to secure additional volumes.· Asia’s producers have incentive to sustain steady demand over coming weeks and to cut inventories ahead of slowdown in activity during summer months..· Domestic Chinese Group II light-grade price premium to diesel prices holds in a narrow range close to recent highs.· Firm base oil premium to diesel incentivizes refiners to produce more base oils.· Prospect of seasonal slowdown in diesel consumption could add to that incentive.· Firm premium to diesel implies strong demand and tight supply.· China’s supply is likely to improve as plant maintenance work draws to a close.· Prospect of rise in supply and still-muted demand could put pressure on base oil premium to diesel..· US base oils prices maintain higher premium vs diesel than before wave of posted price-cuts in April.· Buyers’ concern that US producers would cut prices had been a factor behind weaker-than-usual demand in late Q1/early Q2 2023.· US prices’ sustained strength vs diesel could revive that concern..Global base oils - week of May 8: Price outlook - margins.Contact us for more information about the data for this story
