· Global base oils prices turn more mixed vs feedstock/competing fuel prices, pointing to diverging supply-demand trends in different regions.· Asia’s base oils prices extend sharp slide vs competing fuel prices, pointing to weaker supply-demand fundamentals and incentivizing refiners to adjust production levels accordingly.· Group I base oils prices in Europe and Group II prices in US hold firm or rise vs feedstock prices, pointing to firmer supply-demand fundamentals and boosting incentive for refiners to maintain or raise output.· Moves to sustain or raise output would coincide with a time of year, in July and August, when domestic demand in Europe and US typically faces a seasonal slowdown. · FOB NE Asia Group II N150/N500 premium to gasoil extends slide to lowest since H1 April 2024..· FOB NE Asia Group II light-grade premium to gasoil falls faster than heavy grades, increasing discount to heavy grades to widest since early 2022.· Firmer heavy-grade prices relative to light grades partially cushion pressure on margins.· Any moves to maintain base oils output at current levels would coincide with weak demand throughout the region.· FOB Asia Group I base oils premium to gasoil falls less steeply than Group II prices.· Slower fall in Group I premium curbs pressure on refiners to adjust output accordingly..· China’s domestic Group II N150 base oils price premium to Shandong diesel prices holds steady in middle of narrow range it has maintained since end-2023..· Steady premium incentivizes China’s domestic refiners to maintain output levels.· Steady premium contrasts with slumping FOB NE Asia Group II premium to Singapore gasoil prices.· Steady premium coincides with/reflects signs of firmer domestic China Group II prices relative to FOB Asia cargo prices in recent weeks.· Diverging premiums point to firmer supply-demand trends in China relative to rest of Asia..· CFR India N70 premium to Singapore gasoil prices extends fall to lowest since Feb 2024..· Lower premium makes more marginal the feasibility of moving cargoes from Asia to India.· Lower premium incentivizes buyers to target lower FOB Asia cargo prices to make arbitrage more feasible.· Lower premium in turn curbs incentive for Asia’s refiners to produce more very-light grade base oils, raising prospect of slowdown in supply over coming months..· Europe’s domestic Group I light-grade base oils prices hold steadier vs VGO prices, contrasting with weaker Group II/III prices.· Trend reflects ongoing narrowing of Group II/III premium to Group I base oils.· Europe’s Group I export price premium to VGO rises, stays close to highest since late-2022..· More limited surplus availability in Europe supports and limits benefit of firm export price premium to VGO.· Europe’s domestic Group II light-grade price premium to VGO extends fall, slips less steeply than in Asia, more steeply than in US..· US Group II domestic prices edge up vs VGO after slipping since early June 2024.· US Group II domestic light-grade price premium to VGO holds firm, stays well above average levels over past year..· Firm Group II premium to VGO sustains incentive for refiners to maintain or raise base oils output..Global base oils margins outlook: Week of 24 June.Global base oils demand outlook: Week of 24 June
· Global base oils prices turn more mixed vs feedstock/competing fuel prices, pointing to diverging supply-demand trends in different regions.· Asia’s base oils prices extend sharp slide vs competing fuel prices, pointing to weaker supply-demand fundamentals and incentivizing refiners to adjust production levels accordingly.· Group I base oils prices in Europe and Group II prices in US hold firm or rise vs feedstock prices, pointing to firmer supply-demand fundamentals and boosting incentive for refiners to maintain or raise output.· Moves to sustain or raise output would coincide with a time of year, in July and August, when domestic demand in Europe and US typically faces a seasonal slowdown. · FOB NE Asia Group II N150/N500 premium to gasoil extends slide to lowest since H1 April 2024..· FOB NE Asia Group II light-grade premium to gasoil falls faster than heavy grades, increasing discount to heavy grades to widest since early 2022.· Firmer heavy-grade prices relative to light grades partially cushion pressure on margins.· Any moves to maintain base oils output at current levels would coincide with weak demand throughout the region.· FOB Asia Group I base oils premium to gasoil falls less steeply than Group II prices.· Slower fall in Group I premium curbs pressure on refiners to adjust output accordingly..· China’s domestic Group II N150 base oils price premium to Shandong diesel prices holds steady in middle of narrow range it has maintained since end-2023..· Steady premium incentivizes China’s domestic refiners to maintain output levels.· Steady premium contrasts with slumping FOB NE Asia Group II premium to Singapore gasoil prices.· Steady premium coincides with/reflects signs of firmer domestic China Group II prices relative to FOB Asia cargo prices in recent weeks.· Diverging premiums point to firmer supply-demand trends in China relative to rest of Asia..· CFR India N70 premium to Singapore gasoil prices extends fall to lowest since Feb 2024..· Lower premium makes more marginal the feasibility of moving cargoes from Asia to India.· Lower premium incentivizes buyers to target lower FOB Asia cargo prices to make arbitrage more feasible.· Lower premium in turn curbs incentive for Asia’s refiners to produce more very-light grade base oils, raising prospect of slowdown in supply over coming months..· Europe’s domestic Group I light-grade base oils prices hold steadier vs VGO prices, contrasting with weaker Group II/III prices.· Trend reflects ongoing narrowing of Group II/III premium to Group I base oils.· Europe’s Group I export price premium to VGO rises, stays close to highest since late-2022..· More limited surplus availability in Europe supports and limits benefit of firm export price premium to VGO.· Europe’s domestic Group II light-grade price premium to VGO extends fall, slips less steeply than in Asia, more steeply than in US..· US Group II domestic prices edge up vs VGO after slipping since early June 2024.· US Group II domestic light-grade price premium to VGO holds firm, stays well above average levels over past year..· Firm Group II premium to VGO sustains incentive for refiners to maintain or raise base oils output..Global base oils margins outlook: Week of 24 June.Global base oils demand outlook: Week of 24 June
