· Global base oils prices edge higher vs feedstock/competing fuel prices, ICIS data shows.· Increasingly firm base oils premium to feedstock/diesel prices contrasts with weak diesel premium to crude.· Contrasting trends add to incentive for refiners to produce more base oils.· FOB NE Asia Group II N150/N500 price premium to Singapore gasoil prices extend rise to highest since Q2 2023.· Rising premium incentivizes refiners to maximise base oils output.· FOB NE Asia Group II N150/N500 premium to gasoil similarly rose from March to May 2023, before beginning sharp fall from mid-May 2023.· FOB Asia Group I brightstock premium to gasoil extends rise to highest since end-2021..· Sustained strength of brightstock premium especially reflects structurally tighter supply, complicating refiners’ ability to raise output..· China’s domestic Group II N150 premium to Shandong diesel prices edges lower, holding in narrow range since end-Dec 2023.· Steady premium shows signs of providing sufficient incentive for domestic refiners to maintain steady output.· China’s domestic premium for imported Group II N150 over Shandong diesel prices rises to highest since before 2023..· Disconnect vs premium for domestic supplies points to tighter availability of imported supplies.· Disconnect reflects option for overseas refiners to move shipments to other markets where prices are higher, and more limited options for domestic refiners in China to do the same..· CFR India N70 premium to Singapore gasoil prices edges lower, stays close to highest since Q4 2023..· Firm premium incentivizes Asia’s refiners to maintain or raise base oils output rather than redirect feedstock or very-light grade supplies into the diesel pool..· Europe’s domestic Group I prices, and especially brightstock, extend rise vs VGO.· Domestic brightstock premium to VGO rises to highest since Jan 2024..· Rising premium incentivizes refiners to boost output of the heavy-grade product.· Europe’s Group III 4cSt premium to VGO extends recovery, shows signs of bottoming out for now after sustained slide since Q2 2023..· US domestic Group II light-grade premium to VGO holds at highest since early-Jan 2024.· Rebound in Group II light-grade premium to VGO outpaces heavy grades, export supplies and Group III base oils over past month..· US Group III 4cSt premium to VGO recovers over past month, stays close to lowest since Q1 2021.· US Group II light-grade posted price premium to VGO rises to six-month high; US Group III posted price premium to VGO holds close to lowest since Q2 2022..Asia base oils demand outlook: Week of 20 May.Asia base oils supply outlook: Week of 20 May
