· Europe Group II price premium to US prices stays wide; premium to Asia prices widens further, especially for heavy grades.· Wide premium incentivizes overseas refiners to target Europe with more surplus supplies.· Weak US/Asia Group II export prices vs diesel could instead prompt refiners to cut production, curbing such flows.· Europe Group I prices maintain wide premium to Asia prices.· Trend incentivizes surplus Asia supplies to target India/Mideast Gulf markets.· Trend cuts arbitrage outlets for any surplus Group I supplies from Europe.· Closed arbitrage from Europe had been manageable in recent months as steady regional demand absorbed most supplies. That trend will need to continue to avoid supply-build.· Asia’s Group II heavy-grade price discount to US prices widens over past month to widest in almost three months, stays much lower than 2022 levels.· Asia Group I bright stock prices stay competitive vs Europe and US prices, maintaining arbitrage opportunities.· Asia bright stock discount to domestic China prices increases to widest in two months, though arb stays difficult.· Asia Group II light-grade prices move to discount to domestic Chinese prices for first time in more than two months; Group II heavy-grade discount at widest in more than three months.· Arbitrage to move Asia Group II supplies to China stays hard to work, but more feasible than in recent months.· Steeper drop in Asia prices than domestic Chinese prices coincides with signs of weak Chinese demand, suggests domestic supply tighter than expected or domestic prices face sharp correction. .Global base oils - week of July 17: Price outlook - margins
· Europe Group II price premium to US prices stays wide; premium to Asia prices widens further, especially for heavy grades.· Wide premium incentivizes overseas refiners to target Europe with more surplus supplies.· Weak US/Asia Group II export prices vs diesel could instead prompt refiners to cut production, curbing such flows.· Europe Group I prices maintain wide premium to Asia prices.· Trend incentivizes surplus Asia supplies to target India/Mideast Gulf markets.· Trend cuts arbitrage outlets for any surplus Group I supplies from Europe.· Closed arbitrage from Europe had been manageable in recent months as steady regional demand absorbed most supplies. That trend will need to continue to avoid supply-build.· Asia’s Group II heavy-grade price discount to US prices widens over past month to widest in almost three months, stays much lower than 2022 levels.· Asia Group I bright stock prices stay competitive vs Europe and US prices, maintaining arbitrage opportunities.· Asia bright stock discount to domestic China prices increases to widest in two months, though arb stays difficult.· Asia Group II light-grade prices move to discount to domestic Chinese prices for first time in more than two months; Group II heavy-grade discount at widest in more than three months.· Arbitrage to move Asia Group II supplies to China stays hard to work, but more feasible than in recent months.· Steeper drop in Asia prices than domestic Chinese prices coincides with signs of weak Chinese demand, suggests domestic supply tighter than expected or domestic prices face sharp correction. .Global base oils - week of July 17: Price outlook - margins
