Global base oils margins outlook - week of April 1

·        Asia's base oils prices extend rise vs competing/feedstock prices, incentivizing refiners to maintain or raise output.

·        Europe’s Group I domestic base oils price premium to VGO stays unusually weak.

·        US’ Group II export price premium to VGO stays unusually weak even after recent rebound.

·        Weaker values incentivize refiners to trim output.

·        FOB Asia base oil prices extend rise vs regional gasoil prices, boosting incentive for refiners to maintain or raise output.

·        FOB Asia Group I brightstock premium to gasoil rises to highest since May 2023, pointing to ongoing supply tightness.

·        FOB NE Asia Group II heavy-grade premium to gasoil rises to highest since June 2023.

·        Rising premium boosts incentive for refiners to focus on maximising output of heavy-grade supplies.

·        China’s domestic Group II 150N base oil premium to Shandong diesel rises to highest in a month, stays below highest level so far in 2024 and well below year-earlier levels.

·        Rangebound premium at a time of year when demand usually peaks points to sufficient supply, curbs incentive for refiners to boost output.

·        CFR India Group II N70 premium to Asia gasoil prices rises to highest in more than three months.

·        Higher premium boosts incentive for Asia’s refiners to maintain output of very-light grade base oils.

·        Europe’s Group I domestic price premium to VGO prices stay unusually low.

·        Europe’s Group I domestic SN500 premium to VGO holds close to lowest since Q1 2022.

·        Europe’s Group I domestic brightstock premium to VGO holds close to lowest since H2 2020.

·        Low premiums to VGO incentivize refiners to cut output.

·        Europe’s Group I export prices extend strong recovery through March 2024 to highest since start of the year.

·        Firmer export price margins unlikely to incentivize refiners to raise output.

·        Europe Group II light-grade premium to VGO holds close to lowest since Oct 2023, stays below year-earlier levels.

·        Europe Group III 4cSt (low) premium to VGO extends gradual fall to lowest since Q1 2022.

·        US Group II export price differential to heating oil/VGO prices stays unusually weak even as it rebounds in H2 March 2024.

·        US Group II N100 export price premium to VGO rises to highest in almost two months, still down more than $300/t since Nov 2023.

·        Still-weak export prices maintain incentive for refiners to curb output of surplus supplies.

·        US domestic Group II price premium to VGO holds close to lowest in more than two years.

·        US Group II light-grade posted-price premium to VGO holds in narrow range close to lowest since Q3 2023.

·        Weak margins point to demand that is insufficient to absorb plentiful supply.

·        US Group III 4cSt price premium to VGO holds close to lowest in more than three years.

·        Sustained, gradual drop in Group III price premium points to ongoing imbalance in supply-demand fundamentals.