Global base oils - week of July 17: Price outlook - inter-grades

·        Europe Group I prices correct faster than Group II prices, improving their competitiveness.

·        Europe unapproved Group III base oils premium to Group II prices continues to narrow.

·        Trend could boost buying interest from blenders with flexibility to adjust formulations fast.

·        Any continuation of trend for extended period likely to add to buying interest even among blenders with less flexibility.

·        Any pick-up in demand for Europe Group I base oils or unapproved Group III base oils could impact demand for Group II base oils.

·        Gap continues to widen between European prices for approved and unapproved Group III base oils.

·        Trend incentivizes blenders to minimize consumption of Group III supplies with approvals.

·        Asia Group I heavy-grade prices weaken relative to light grades.

·        Asia Group II prices weaken relative to Group I base oils.

·        Trend could boost demand for Group II base oils, pressure demand for Group I supplies.

·        Asia Group II heavy-grade prices maintain narrow premium to light grades.

·        US Group II heavy-grade prices maintain wide premium to light grades.