Global base oils margins outlook: Week of 31 March

·         Global base oils prices slip relative to firmer feedstock/competing fuel prices.

·         Base oils margins in most markets remain at levels that point to balanced-to-tight supply-demand fundamentals, incentivizing refiners to maintain higher output.

·         FOB Asia base oils prices fall vs gasoil prices.

·         Group I/II heavy-grade values hold firm vs gasoil, cushioning impact of weaker light-grade price differentials.

·         Light-grade base oils premium to gasoil remains much higher than mid-Jan 2025 and similar to year-earlier levels.

·         Firm margins for light/heavy-grades combined point to still-tight market fundamentals, incentivizing refiners to raise or maintain high output.

·         China’s domestic Group I SN 400 base oils price holds firm vs Shandong diesel price.

·         Premium holds at highest since end-Nov 2024 after rebounding since H1 Jan 2025.

·         Premium rises more strongly than Group II N500 premium to diesel, coincides with plant maintenance work in China.

·         CFR India Group II N70 premium to Singapore gasoil extends fall, remains close to highest since end-Q3 2024.

·         Still-firm premium keeps arbitrage open to move more very-light grade base oils shipments to India.

·         Firm premium sustains incentive for overseas refiners to keep very-light grades in base oils pool rather than divert into diesel pool.

·         Europe’s Group I export price-premium to VGO falls less steeply than domestic Group I/II prices.

·         Europe’s Group I export price premium to VGO remains much higher than year-earlier levels.

·         Firm base oils values reflect tight supply-demand fundamentals for Group I export volumes.

·         Persistently-firm base oils price differentials point to limited ability to raise supply, combined with still-firm buying interest.

·         US Group II light-grade domestic price premium to VGO holds firm after rising in March 2025.

·         Firmer premium contrasts with Group II light-grade export price-premium that holds in narrow range since start of 2025.

·         Steady Group II export-price premium to VGO contrasts with surging export and domestic price premium this time a year earlier.

·         Steady Group II export price-premium points to market fundamentals that are less tight vs same time a year ago.