· Global base oils prices stay unusually firm vs feedstock/competing fuel prices even as premiums edge lower.· Firm base oils values point to strong supply-demand fundamentals, incentivize refiners to maintain high output.· Higher output sustains need for demand to stay firm to avoid supply-build.· FOB Asia Group I/II base oils price premium to Singapore gasoil price edges lower, stays unusually high.· FOB Asia Group II N500 premium to Singapore gasoil holds close to highest since Q4 2021 at a time of year when it is usually much lower..· Sustained strength of base oils premium suggests regional refiners’ supply remained at a level that avoided the need for sharp price adjustments..· China’s domestic Group II N150 premium to Shandong diesel prices holds firm, stays in narrow range for almost three months, contrasts with slump in premium during same period a year earlier..· China’s domestic Group II N500 premium to diesel extends rise to highest in more than two years.· Strength of premium points to strong supply-demand fundamentals for the heavy-grade base oil..· CFR India Group II N70 premium to Singapore gasoil price edges down, holds close to highest since H1 June 2024, contrasts with discount to gasoil the same time a year earlier..· Premium holds firm even during monsoon season, when India’s demand typical ebbs.· Firm premium keeps open the arbitrage to move more very-light grade base oils to India, incentivizes Asia’s refiners to maintain higher output of the grade..· Europe’s domestic Group I light-grade premium to VGO edges down to lowest in more than a month, stays well above year-earlier levels.· Europe’s Group II light-grade premium to VGO falls less steeply, holds close to highest since start of 2024..· Trend extends pattern of Group II light-grade values firming relative to Group I values over past month.· Still-high premium for Group I/II base oils incentivizes refiners to maintain or raise output levels of the grades..· US Group II export light-grade premium to VGO edges down, holds close to highest since Q4 2022; domestic premium holds close to highest since Q2 2023..· Strength of price premium points to tight supply-demand fundamentals, incentivizes refiners to maximise output.· Dynamic could trigger faster build-up of surplus supply if strength of demand is weaker than any supply-tightness.· US Group II light-grade posted price premium to VGO stays high even after refiner’s price adjustment at start of Sept 2024..Asia base oils demand outlook: Week of 2 Sept.Asia base oils supply outlook: Week of 2 Sept
· Global base oils prices stay unusually firm vs feedstock/competing fuel prices even as premiums edge lower.· Firm base oils values point to strong supply-demand fundamentals, incentivize refiners to maintain high output.· Higher output sustains need for demand to stay firm to avoid supply-build.· FOB Asia Group I/II base oils price premium to Singapore gasoil price edges lower, stays unusually high.· FOB Asia Group II N500 premium to Singapore gasoil holds close to highest since Q4 2021 at a time of year when it is usually much lower..· Sustained strength of base oils premium suggests regional refiners’ supply remained at a level that avoided the need for sharp price adjustments..· China’s domestic Group II N150 premium to Shandong diesel prices holds firm, stays in narrow range for almost three months, contrasts with slump in premium during same period a year earlier..· China’s domestic Group II N500 premium to diesel extends rise to highest in more than two years.· Strength of premium points to strong supply-demand fundamentals for the heavy-grade base oil..· CFR India Group II N70 premium to Singapore gasoil price edges down, holds close to highest since H1 June 2024, contrasts with discount to gasoil the same time a year earlier..· Premium holds firm even during monsoon season, when India’s demand typical ebbs.· Firm premium keeps open the arbitrage to move more very-light grade base oils to India, incentivizes Asia’s refiners to maintain higher output of the grade..· Europe’s domestic Group I light-grade premium to VGO edges down to lowest in more than a month, stays well above year-earlier levels.· Europe’s Group II light-grade premium to VGO falls less steeply, holds close to highest since start of 2024..· Trend extends pattern of Group II light-grade values firming relative to Group I values over past month.· Still-high premium for Group I/II base oils incentivizes refiners to maintain or raise output levels of the grades..· US Group II export light-grade premium to VGO edges down, holds close to highest since Q4 2022; domestic premium holds close to highest since Q2 2023..· Strength of price premium points to tight supply-demand fundamentals, incentivizes refiners to maximise output.· Dynamic could trigger faster build-up of surplus supply if strength of demand is weaker than any supply-tightness.· US Group II light-grade posted price premium to VGO stays high even after refiner’s price adjustment at start of Sept 2024..Asia base oils demand outlook: Week of 2 Sept.Asia base oils supply outlook: Week of 2 Sept
