· Global base oils prices mostly fall versus feedstock/competing fuel prices.· Price-differentials fall more steeply in Europe and US than in Asia, pointing to weaker supply-demand fundamentals in those markets.· Even with lower differentials, global base oils margins hold at levels that incentivize refiners to maintain firm output.· Firm output would increase need for pick-up in demand to absorb rising supplies.· Firm output and lagging demand would increase prospect of additional rise in surplus supplies..· FOB Asia base oils prices fall versus Singapore gasoil prices..· Heavy-grade price-differentials remain at elevated levels even if down from Q2 2025.· Firm margins incentivize refiners to maintain high output of heavy-grade base oils.· High margins for Group I heavy grades coincide with signs of pick-up in spot supply.· Demand would need to hold at elevated levels to absorb pick-up in spot supply..· Light-grade margins dip even amid signs of firmer fundamentals for those grades.· Dynamic could prompt price-adjustment to maintain margins at levels that sustain higher output levels.· Domestic China Group II N150 price-premium to Singapore gasoil extends rise to highest since mid-May 2025..· Rising N150 price-premium points to firmer supply-demand fundamentals, boosts incentive for refiners to raise output.· Price-premium extends rise even with recent jump in China’s Group II output and more feasible arbitrage.· Rising price-premium and rising supply points to strong demand or sharp build-up of inventories..· CFR India Group II N70 price-premium to Singapore gasoil extends fall to lowest in more than a month..· Price-premium stays at elevated level even after correction in recent weeks.· Any extension of drop in price-premium could point to weaker fundamentals and prompt overseas refiners to consider adjusting production levels.· Any signs of N70 price-premium holding at or rising from current levels would point to still-firm demand and incentivize overseas refiners to maintain higher output of very-light grade base oils..· Europe Group I export base oils price-premium to vacuum gasoil (VGO) falls, especially for light grades..· Brightstock price-premium to VGO stays unusually high, pointing to still-strong supply-demand fundamentals.· Group I SN 500 premium to VGO falls to lowest since early-April 2025.· Group I SN 150 premium to VGO falls to lowest since April 2024.· Weaker margins highlight increasingly wide disconnect between brightstock prices and light/heavy-neutrals prices.· Group I export margins remain higher than usual even with recent weakness.· Firm margins could incentivize refiners to maintain high output even with recent weakness..· US Group II domestic N600 premium to VGO falls to lowest in more than four years..· Fall in heavy-grade price-premium to VGO extends trend since margins peaked in H1 2023.· Fall in heavy-grade price-premium in Q3 2025 contrasts with higher premium in Q3 2024.· Fall in heavy-grade price-premium points to persistent disconnect between supply and demand.· Base oils margins typically trend lower in fourth quarter of the year, raising prospect of further pressure on heavy-grade margins.· Even at lower levels, heavy-grade margins remain high, sustaining incentive for refiners to maintain steady output of the product..Asia base oils demand outlook: Week of 8 September.Asia base oils supply outlook: Week of 8 September.Base Oil News stories and analysis also available on ICIS platform
