· Global base oils values mostly extend rise vs feedstock/competing fuel prices after crude oil prices slide.· Base oils margins were already unusually firm, especially for the time of year.· Firm margins already incentivized refiners to raise or maintain high base oils output.· Further rise in margins could start to impact demand more than supply.· FOB Asia Group I/II base oils premium to Singapore gasoil extends strong rise, contrasts with year earlier when price differential was barely positive.· FOB NE Asia Group II heavy-grade premium to gasoil rises to highest since Q4 2021, adding to incentive for refiners to maximise output..· Sustained strength of base oils premium points either to rising supply-build or to tighter-than-expected supply even with refiners boosting output..· China’s domestic Group II N150 base oils price premium to Shandong diesel prices extends rise to highest in almost four months; N500 premium rises to highest since late-2021..· Persistently-firm Group II premium to diesel prices through Q3 2024 contrasts with slump in premium in Q3 2023, points to strong supply-demand fundamentals..· CFR India Group II N70 premium to Singapore gasoil price rises to highest since Nov 2023..· Rising N70 premium keeps arbitrage open, incentivizes refiners to maximise sales for base oils market.· N70 premium stays higher than usual for most of past five months, even at a time when India’s lube demand usually faces slowdown during monsoon season.· Persistently high premium points to balanced-to-tight supply even with refiners incentivized to maximise output and sales of the product..· Europe Group I base oils premium to VGO holds firm in narrow range since early-Aug 2024.· Europe Group III 4cSt (low) base oils premium to VGO extends strong rebound since early-July 2024, climbing to highest since early Feb 2024..· Rising Group III premium outpaces firm Group I/Group II premium to VGO.· Rising Group III premium to VGO coincides with plant maintenance work in Asia and then in Europe..· US Group II light-grade export price-premium to VGO extends rise to highest since end-Q2 2022..· Steep premium incentivizes refiners to maintain or raise base oils output.· Persistently steep premium suggests supply remains tighter than usual even with that incentive to raise output.· Steep premium gives refiners the room to adjust prices and still maintain steep premium to VGO..Asia base oils demand outlook: Week of 9 Sept.Asia base oils supply outlook: Week of 9 Sept
· Global base oils values mostly extend rise vs feedstock/competing fuel prices after crude oil prices slide.· Base oils margins were already unusually firm, especially for the time of year.· Firm margins already incentivized refiners to raise or maintain high base oils output.· Further rise in margins could start to impact demand more than supply.· FOB Asia Group I/II base oils premium to Singapore gasoil extends strong rise, contrasts with year earlier when price differential was barely positive.· FOB NE Asia Group II heavy-grade premium to gasoil rises to highest since Q4 2021, adding to incentive for refiners to maximise output..· Sustained strength of base oils premium points either to rising supply-build or to tighter-than-expected supply even with refiners boosting output..· China’s domestic Group II N150 base oils price premium to Shandong diesel prices extends rise to highest in almost four months; N500 premium rises to highest since late-2021..· Persistently-firm Group II premium to diesel prices through Q3 2024 contrasts with slump in premium in Q3 2023, points to strong supply-demand fundamentals..· CFR India Group II N70 premium to Singapore gasoil price rises to highest since Nov 2023..· Rising N70 premium keeps arbitrage open, incentivizes refiners to maximise sales for base oils market.· N70 premium stays higher than usual for most of past five months, even at a time when India’s lube demand usually faces slowdown during monsoon season.· Persistently high premium points to balanced-to-tight supply even with refiners incentivized to maximise output and sales of the product..· Europe Group I base oils premium to VGO holds firm in narrow range since early-Aug 2024.· Europe Group III 4cSt (low) base oils premium to VGO extends strong rebound since early-July 2024, climbing to highest since early Feb 2024..· Rising Group III premium outpaces firm Group I/Group II premium to VGO.· Rising Group III premium to VGO coincides with plant maintenance work in Asia and then in Europe..· US Group II light-grade export price-premium to VGO extends rise to highest since end-Q2 2022..· Steep premium incentivizes refiners to maintain or raise base oils output.· Persistently steep premium suggests supply remains tighter than usual even with that incentive to raise output.· Steep premium gives refiners the room to adjust prices and still maintain steep premium to VGO..Asia base oils demand outlook: Week of 9 Sept.Asia base oils supply outlook: Week of 9 Sept
