· Global base oils prices remain firm or extend rise vs feedstock/competing fuel prices at a time of year when they typically face downward pressure.· Strong margins point to firm supply-demand fundamentals, incentivize refiners to increase or maintain high output levels.· FOB Asia Group I/II base oil price premium to Singapore gasoil extends rise, especially for Group II heavy grades..· Base oils premium extends rise at a time of year when regional demand faces a seasonal slowdown.· Rising base oils premium contrasts with falling premium at same time in summer 2022 and 2023.· Strength of base oils premium raises risk of higher base oils production and rise in surplus supply.· Sustained strength of base oils premium instead suggests that supply is at level that matches or lags demand..· China’s domestic Group II light-grade premium to Shandong diesel prices turns more volatile, dips to lowest since March 2024 but stays well above year-earlier levels..· China’s domestic Group I light-grade premium to diesel falls more sharply from multi-year high to lowest in almost four months.· China’s domestic base oils premiums to diesel remain at levels that incentivize refiners to maintain or raise output.· Sharper fall in the premium could point to more marked change in fundamentals..· Premium of CFR India Group II N70 price over Singapore gasoil extends sharp rebound to highest in more than two months..· Rising premium contrasts with same time a year earlier, when N70 differential fell to a discount to Singapore gasoil prices.· Rising premium incentivizes Asia’s refiners to offer more very-light grade base oils supplies..· Europe’s base oils prices extend rise vs VGO, contrast with dip in premium to VGO the same time a year ago.· Europe’s Group I light, heavy-grade price premium to VGO extends rise to highest since end-2022/early-2023..· Sustained strength of premium suggests any subsequent rise in output remains insufficient to cover demand.· Europe’s Group II light-grade premium to VGO rises to highest since start of 2024, pointing to still-firm supply-demand fundamentals..· Europe’s Group II price premium to VGO moves back above US Group II premium to VGO, with gap between the two unusually narrow since late-June 2024..· US Group II domestic light-grade premium to VGO holds at highest since May 2023.· US export light-grade price premium holds at highest since Oct 2022..· Firm premiums incentivize refiners to maximise base oils output.· Strength of base oils premium for extended period suggests supply continues to lag demand even with refiners facing sustained incentive to maintain high output levels..Asia base oils supply outlook: Week of 12 Aug
· Global base oils prices remain firm or extend rise vs feedstock/competing fuel prices at a time of year when they typically face downward pressure.· Strong margins point to firm supply-demand fundamentals, incentivize refiners to increase or maintain high output levels.· FOB Asia Group I/II base oil price premium to Singapore gasoil extends rise, especially for Group II heavy grades..· Base oils premium extends rise at a time of year when regional demand faces a seasonal slowdown.· Rising base oils premium contrasts with falling premium at same time in summer 2022 and 2023.· Strength of base oils premium raises risk of higher base oils production and rise in surplus supply.· Sustained strength of base oils premium instead suggests that supply is at level that matches or lags demand..· China’s domestic Group II light-grade premium to Shandong diesel prices turns more volatile, dips to lowest since March 2024 but stays well above year-earlier levels..· China’s domestic Group I light-grade premium to diesel falls more sharply from multi-year high to lowest in almost four months.· China’s domestic base oils premiums to diesel remain at levels that incentivize refiners to maintain or raise output.· Sharper fall in the premium could point to more marked change in fundamentals..· Premium of CFR India Group II N70 price over Singapore gasoil extends sharp rebound to highest in more than two months..· Rising premium contrasts with same time a year earlier, when N70 differential fell to a discount to Singapore gasoil prices.· Rising premium incentivizes Asia’s refiners to offer more very-light grade base oils supplies..· Europe’s base oils prices extend rise vs VGO, contrast with dip in premium to VGO the same time a year ago.· Europe’s Group I light, heavy-grade price premium to VGO extends rise to highest since end-2022/early-2023..· Sustained strength of premium suggests any subsequent rise in output remains insufficient to cover demand.· Europe’s Group II light-grade premium to VGO rises to highest since start of 2024, pointing to still-firm supply-demand fundamentals..· Europe’s Group II price premium to VGO moves back above US Group II premium to VGO, with gap between the two unusually narrow since late-June 2024..· US Group II domestic light-grade premium to VGO holds at highest since May 2023.· US export light-grade price premium holds at highest since Oct 2022..· Firm premiums incentivize refiners to maximise base oils output.· Strength of base oils premium for extended period suggests supply continues to lag demand even with refiners facing sustained incentive to maintain high output levels..Asia base oils supply outlook: Week of 12 Aug
