· Global base oils price premium to feedstock/competing fuel prices stays higher at end-April 2025 than a month earlier.· Higher margins coincide with seasonal rise in demand and plant maintenance work.· Higher margins follow sharp fall in crude oil prices.· Higher margins point to fundamentals that are firm enough to outweigh pressure from lower crude oil prices.· Higher margins also incentivize refiners to raise or maintain high output levels.· High margins and firm output would require that demand stays strong to absorb any pick-up in supplies..· Asia’s base oils prices hold firm vs Singapore gasoil prices..· Ongoing strength of Group I/II margins suggests supply-demand fundamentals remain firm.· Ongoing strength of base oils margins incentivizes refiners to maintain high output levels.· Any moves to maintain high output would speed up build-up of surplus supplies if fundamentals were to weaken.· Supply-demand fundamentals face prospect of weakening by end-Q2 2025 once heavy round of plant maintenance draws to a close..· China’s domestic Group I/II base oils prices mostly extend rise vs Shandong diesel prices.· China’s Group II light-grade price premium to Shandong diesel extends rise but lags levels in Jan-April 2024..· Price premium stays relatively weak vs year-earlier levels even with round of plant maintenance in China and seasonal rise in demand.· Lower price premium could point to balanced-to-weak fundamentals even with seasonal boost and drop in output..· CFR India Group II N70 premium to Singapore gasoil holds steady at high level..· High N70 premium facilitates arbitrage to move shipments to India, incentivizes Asia refiners to boost output of very-light grade base oils.· Sustained strength of N70 premium for past two months suggests any pick-up in supply so far remains insufficient to outpace demand.· Dynamic raises prospect of N70 premium extending its current price strength..· Europe’s Group II base oils price premium to VGO holds firm, close to highest since Oct-Nov 2024..· Group II premium to VGO rises more strongly than domestic Group I base oils premium in April 2025.· Rising Group II premium and more rapid rise in premium points to firm fundamentals vs Group I base oils.· Firmer Group II premium could incentivize moves to support higher regional output and to move more supplies from other regions to Europe.· Firm Group II premium coincides with signs of healthy availability of supply and cautious demand..· US Group II base oils export price premium to VGO holds onto most of its strong gains in April 2025..· Group II premium remains well above year-earlier levels even without repeat of surge in margins from March 2024 that followed slump in margins in Jan-Feb 2024.· Firmer and more range-bound margins so far this year compared with last year suggests any supply-build remains more manageable and fundamentals more balanced.· Any extension of more balanced fundamentals could continue to support margins at firmer and more rangebound levels.· More rangebound margins would avoid repeat of surge in export margins that US market faced in Q2-Q3 2024..Asia base oils demand outlook: Week of 28 April.Asia base oils supply outlook: Week of 28 April
