· Europe’s Group I base oils price premium to diesel edges down, holds close to highest since Aug 2022 after rising more than $450/t since 2H Jan.· Europe’s Group II base oils price premium to diesel edges down, holds close to highest since Sep 2022..· Firm base oils premiums insinuate strong supply-demand fundamentals, incentivize refiners to boost production.· Refiners face challenge of balancing firm margins with likely slowdown in demand in Q3 2023.· Asia Group I base oils price premium to diesel falls over past week, stays unusually firm close to highest since July 2022.· Asia Group II base oils price premium to diesel falls over past week, stays close to highest since July 2022..· Firm premiums suggest strong supply-demand fundamentals – at a time when plant-maintenance trims regional supply, while demand slows vs Q1.· Firm premiums incentivize regional refiners to raise base oils output.· Domestic China light-grade Group II premium to diesel falls to lowest since early March, still holding close to highest in more than a year..· Premium maintains firm level since mid-Feb 2023, incentivizing domestic refiners to boost base oils output.· Firm premium coincides with expectations of weakening supply-demand fundamentals.· Relatively weaker diesel premium to crude adds to attraction of producing more base oils.· US posted price premium to diesel slips but stays elevated at levels that insinuate strong supply-demand fundamentals..· Strong US base oils premium to diesel incentivizes refiners to boost base oils production.· Strong US base oils premium raises likelihood of boosting supply, prolonging surplus..Global base oils - week of May 15: Price outlook - arbitrage
· Europe’s Group I base oils price premium to diesel edges down, holds close to highest since Aug 2022 after rising more than $450/t since 2H Jan.· Europe’s Group II base oils price premium to diesel edges down, holds close to highest since Sep 2022..· Firm base oils premiums insinuate strong supply-demand fundamentals, incentivize refiners to boost production.· Refiners face challenge of balancing firm margins with likely slowdown in demand in Q3 2023.· Asia Group I base oils price premium to diesel falls over past week, stays unusually firm close to highest since July 2022.· Asia Group II base oils price premium to diesel falls over past week, stays close to highest since July 2022..· Firm premiums suggest strong supply-demand fundamentals – at a time when plant-maintenance trims regional supply, while demand slows vs Q1.· Firm premiums incentivize regional refiners to raise base oils output.· Domestic China light-grade Group II premium to diesel falls to lowest since early March, still holding close to highest in more than a year..· Premium maintains firm level since mid-Feb 2023, incentivizing domestic refiners to boost base oils output.· Firm premium coincides with expectations of weakening supply-demand fundamentals.· Relatively weaker diesel premium to crude adds to attraction of producing more base oils.· US posted price premium to diesel slips but stays elevated at levels that insinuate strong supply-demand fundamentals..· Strong US base oils premium to diesel incentivizes refiners to boost base oils production.· Strong US base oils premium raises likelihood of boosting supply, prolonging surplus..Global base oils - week of May 15: Price outlook - arbitrage
