· Global base oils values extend rise vs feedstock/competing fuel prices, especially for brightstock.· Premiums get boost from lower feedstock costs.· Steady-to-higher base oils prices, even with lower feedstock costs, point to balanced-to-tight supply-demand fundamentals.· Firmer base oils margins and balanced-to-tight fundamentals incentivize refiners to raise production..· FOB Asia Group I/II base oils prices extend rise vs Singapore gasoil at time of year when margins typically rise.· Group I/II heavy-grade base oils premiums to Singapore gasoil rise to levels that are close to or exceed peak levels in 2024..· Already-high premiums could suggest there is more limited room for further upside.· Scenario is more feasible for Group I/II heavy neutrals, which have stayed more rangebound since Aug 2024.· Scenario could be less feasible for brightstock, whose premium has continued to trend higher.· Brightstock’s tight supply fundamentals and lack of an alternative product for now support ongoing price-strength..· China’s Group II N150 premium to Shandong diesel prices extends slide..· Premium mostly trends lower since end-Q3 2024.· Falling premium contrasts with typical rise in margins at start of new year as market fundamentals tighten ahead of spring oil-change season.· Falling premium suggests that fundamentals have avoided that kind of tightness..· CFR India Group II N70 premium to Singapore gasoil prices extends rebound to highest since end-Q3 2024..· Higher price premium, and strength of rebound in the premium, point to firmer supply-demand fundamentals.· Firmer premium boosts feasibility and attraction of moving more overseas shipments of very-light grade base oils to India..· Europe’s Group I brightstock premium to VGO extends sharp rebound to highest since Sept 2024, outpaces improving SN 150/SN 500 premiums..· Rebounding brightstock premium far exceeds year-earlier levels, contrasts with domestic SN 150/SN 500 values that outpace slightly year-earlier levels.· Sustained strength of brightstock premium highlights tight supply and structural difficulty to raise supply.· Smaller rise in SN 150/SN 500 premium to VGO suggests the structural supply-tightness is restricted to brightstock..· US domestic Group II base oils price premium to VGO holds firm in narrow range throughout Feb 2025..· Steady premium supports signs that margins have bottomed out after sustained slide since end-Q3 2024.· Steady premium contrasts with dip in heating oil premium to crude oil in late-Feb 2025, magnifying value of steadier base oils margins.· Even so, Group II N100 premium to VGO stays low compared with typical rise in values during spring oil-change period..Asia base oils demand outlook: Week of 3 March.Asia base oils supply outlook: Week of 3 March.Base Oil News stories and analysis also available on ICIS platform
