· US Group II heavy-grade base oils prices stay unusually weak relative to CFR India prices for the time of year..· Persistent US price-discount to CFR India prices coincides with steady flow of heavy-grade base oils shipments from US to India and especially to Pakistan..· Arbitrage shipments highlight persistent surplus of heavy-grade base oils in US market..· Persistent surplus of US heavy-grade base oils coincides with steep premium of heavy-grade base oils relative to light grades in recent years.· Persistent surplus of US heavy-grade base oils contrasts with tighter availability of light grades, resulting in narrowing spread between US light- and heavy-grade prices over past year..· Premium of US heavy-grade base oils prices over light grades remains high, especially relative to other regions, even after narrowing sharply.· High heavy-grade price-premium continues to incentivize refiners to boost output of the product..· Asia’s Group II light-grade price slips relative to US Group II export price in May 2025 to weakest level in seven months. .· Asia's widening price discount to US export prices coincides with growing surplus availability of light-grade base oils.· Growing availability of Group II light grades contrasts with tighter availability of heavy grades, resulting in increasingly wide spread between Asia light- and heavy-grade base oils prices..· Asia heavy-grade premium over light grades moves higher than US heavy-grade premium over light grades in May 2025 for first time since 2021.· Asia's higher premium highlights contrasting price dynamics in the Asia and US markets..· Premium of Asia heavy-grade base oils over light grades rises after holding at much narrower level in the two years to early-2024.· Narrower heavy-grade premium over light grades before 2024 curbed incentive for refiners to boost output of heavy-grade base oils.· Recent completion of Group II plant maintenance work in US raises prospect of rise in surplus heavy-grade supplies in domestic market and need for outlets to place those volumes.· Tighter availability and firm prices for heavy grades in Asia add to the attraction of moving more supplies from US to that market.· Recent completion of Group II plant maintenance work in Asia raises prospect of rise in surplus light-grade supplies in regional market and need for outlets to place those volumes.· Tighter availability and firm prices for light grades in US add to attraction of moving more supplies from Asia to that market.· Any such scenario raises prospect of US and Asia’s Group II base oils prices adjusting accordingly to make those arbitrage flows more feasible..Global base oils margins outlook: Week of 26 May.Asia base oils demand outlook: Week of 26 May.Asia base oils supply outlook: Week of 26 May
