Global base oils margins outlook: Week of 22 April

·        Global base oils prices mostly rise versus feedstock/competing fuel prices, boosting attraction of maintaining or raising base oils output.

·        FOB Asia Group I and Group II base oil price premiums to regional gasoil prices surge.

·        FOB NE Asia Group II N500 premium to regional diesel price rises to highest since Q2 2023.

·        Surging base oils premium to diesel boosts incentive for refiners to maintain or raise base oils output.

·        Domestic Chinese Group II N150 premium to Shandong diesel prices holds in narrow range so far in April 2024, stays well below year-earlier levels.

·        Steady premium at lower levels curbs prospect of build-up of surplus supplies in China’s domestic market.

·        CFR India Group II N70 premium to Singapore gasoil prices rises to highest in almost five months.

·        Premium surges after holding in narrow range throughout most of this year.

·        Rebounding premium likely reflects more the recent drop in gasoil prices rather than any major change in supply-demand fundamentals.

·        Europe’s Group I export prices extend strong rebound vs VGO since early March 2024 to highest since late last year/early this year.

·        Rising price premiums contrast with more rangebound domestic Group I price premiums to VGO.

·        Europe’s Group II light-grade price premium to VGO extends fall to lowest since end-Q3 2023.

·        Europe’s Group III 4cSt (low) premium to VGO steadies close to lowest since Q2 2022.

·        US Group II export price premium to heating oil extends rise to highest in more than four months.

·        US Group II domestic spot price premium to VGO stays low, close to lowest since Q2 2022.

·        US Group II light-grade posted price premium to VGO holds close to three-month high and similar to year-earlier levels.

·        US Group III 4cSt premium to VGO steadies at lowest since Q1 2021.

·        Sliding Group III 4cSt premium cuts attraction of producing more of the premium-grade product.