· Global base oils values are more mixed relative to feedstock/competing fuel prices, with Asia and Europe price differentials mostly steadier and US margins extending their fall.· Contrasting trends point to differing supply-demand fundamentals in the various markets, with the US facing the most pressure from surplus supply. · Base oils margins set to get boost from fall in crude oil prices at start of this week.· Those margins are likely to face more pressure in markets with weaker supply-demand fundamentals..· FOB Asia Group I/II base oils prices stay firm vs Singapore gasoil prices even as they edge lower..· Base oils margins mostly trend higher and hold firm for most of past year.· Regional supply stays balanced to tight even as firm margins incentivize refiners to maintain or raise output.· Dynamic points to impact of firmer demand and drop in structural supply, curbing any significant supply-build..· China’s domestic Group II light-grade price premium to Shandong diesel price continues gradual downward trend..· Base oils premium faced sharper downward pressure during Q4 in 2022 and 2023, before rebounding strongly from end of the quarter.· Falling premium during that period in 2023 and 2023 coincided with seasonal dip in demand before year-end.· Falling premium this year shows signs of following similar trend..· CFR India Group II N70 premium to Singapore gasoil holds well above recent lows in H1 Oct 2024, well below recent high in mid-Sept 2024..· Premium holds at level that likely sustains incentive for refiners to offer very-light grade supplies into base oils market.· Premium holds in relatively narrow range so far in 2024, contrasting with more extreme volatility in recent years.· Steadier premium points to more balanced supply-demand fundamentals this year..· Europe domestic Group II N150 premium to VGO falls to lowest in more than three months..· Lower premium contrasts with steadier premium for Group II heavy-grade base oils and for Group I SN 150.· Steeper fall in N150 premium could point to diverging supply-demand fundamentals for Group II light grades compared with Group II heavy grades and Group I base oils..· Europe Group II light-grade premium to VGO falls more steeply than US light-grade premium to VGO..· US Group II premium to VGO had mostly fallen more steeply than Europe Group II premium since early-Aug 2024..· US Group II export light/heavy-grade premium to VGO extends fall, with light-grade differential dipping to lowest since May 2024..· Sliding price premium, and prospect of premium extending that fall over coming months, could incentivize refiners to adjust output accordingly..Asia base oils demand outlook: Week of 28 Oct.Asia base oils supply outlook: Week of 28 Oct
· Global base oils values are more mixed relative to feedstock/competing fuel prices, with Asia and Europe price differentials mostly steadier and US margins extending their fall.· Contrasting trends point to differing supply-demand fundamentals in the various markets, with the US facing the most pressure from surplus supply. · Base oils margins set to get boost from fall in crude oil prices at start of this week.· Those margins are likely to face more pressure in markets with weaker supply-demand fundamentals..· FOB Asia Group I/II base oils prices stay firm vs Singapore gasoil prices even as they edge lower..· Base oils margins mostly trend higher and hold firm for most of past year.· Regional supply stays balanced to tight even as firm margins incentivize refiners to maintain or raise output.· Dynamic points to impact of firmer demand and drop in structural supply, curbing any significant supply-build..· China’s domestic Group II light-grade price premium to Shandong diesel price continues gradual downward trend..· Base oils premium faced sharper downward pressure during Q4 in 2022 and 2023, before rebounding strongly from end of the quarter.· Falling premium during that period in 2023 and 2023 coincided with seasonal dip in demand before year-end.· Falling premium this year shows signs of following similar trend..· CFR India Group II N70 premium to Singapore gasoil holds well above recent lows in H1 Oct 2024, well below recent high in mid-Sept 2024..· Premium holds at level that likely sustains incentive for refiners to offer very-light grade supplies into base oils market.· Premium holds in relatively narrow range so far in 2024, contrasting with more extreme volatility in recent years.· Steadier premium points to more balanced supply-demand fundamentals this year..· Europe domestic Group II N150 premium to VGO falls to lowest in more than three months..· Lower premium contrasts with steadier premium for Group II heavy-grade base oils and for Group I SN 150.· Steeper fall in N150 premium could point to diverging supply-demand fundamentals for Group II light grades compared with Group II heavy grades and Group I base oils..· Europe Group II light-grade premium to VGO falls more steeply than US light-grade premium to VGO..· US Group II premium to VGO had mostly fallen more steeply than Europe Group II premium since early-Aug 2024..· US Group II export light/heavy-grade premium to VGO extends fall, with light-grade differential dipping to lowest since May 2024..· Sliding price premium, and prospect of premium extending that fall over coming months, could incentivize refiners to adjust output accordingly..Asia base oils demand outlook: Week of 28 Oct.Asia base oils supply outlook: Week of 28 Oct
