· Europe’s Group II base oils prices start to fall relative to other grades and relative to feedstock prices in Jan 2024, ICIS data shows.· Group II values remain elevated versus Group I/III and VGO even as they slip from recent highs..· Firm prices follow steady rise in Group II base oils values in Q4 2023, when Europe’s Group II supply fundamentals were tighter.· Group II values remain elevated in Jan 2024 even amid signs of improving supply fundamentals, while demand faces typical seasonal slowdown.· Firm Group II values and improving availability raise prospect of growing disconnect between prices and fundamentals..· Firm Group II premium throughout Q4 2023 coincided with signs of tighter supply in Europe.· Europe’s Group II base oils supply fell to thirteen-month low in October 2023..· Europe’s November base oils imports from US fell to seven-month low, raising prospect of region’s Group II supply staying lower well into Q4 2023..· Prospect of tighter supply coincided with/supported surge in Europe’s Group II prices relative to other regions, attracting more shipments from those regions.· Europe’s Group II light-grade price premium to US export prices rose to more than $350/t in Q4 2023, up from less than $100/t at start of Q4 2023.· Europe’s Group II heavy-grade premium to US prices rose to more than $520/t in Q4 2023, after falling to a discount to US prices in Q3 2023..· Europe’s Group II heavy-grade price premium to Asia export prices rose to more than $500/t in Q4 2023, close to highest in a year.· Europe's Group II prices stay high vs other regions in early 2024 even amid signs of more balanced supply-demand fundamentals.· Europe Group II light-grade premium to US prices stays at more than $350/t in Jan 2024.· Europe Group II heavy-grade premium to US prices holds at more than $480/t in Jan 2024.· Europe Group II heavy-grade premium to Asia prices holds at more than $490/t in Jan 2024..· Still-high Group II price premium vs US/Asia prices coincides with prospect of pick-up in supplies from US.· US’ base oils exports to Europe surge to record-high levels in Nov 2023 after slowdown in shipments in preceding months..· Rise in shipments raises prospect of boosting Europe’s Group II base oils supply at end-2023/early 2024..· A rise in supply would coincide with a seasonal slowdown in regional demand at start of the year.· Firm Group II prices relative to other grades could add to pressure on demand for Group II base oils.· Europe’s Group II prices remain firm relative to Group I prices and Group III prices after rising steadily since start of Q4 2023..· Firm Group II values relative to Group I/III base oils incentivize blenders to boost consumption of other grades instead.· Any additional slowdown in demand would coincide with likely improvement in supply.· Any such change in fundamentals would coincide with Group II values that still reflect more the tighter fundamentals in Q4 2023 rather than the current state of the market in early 2024..Global base oils - week of Jan 22: Price outlook - margins
· Europe’s Group II base oils prices start to fall relative to other grades and relative to feedstock prices in Jan 2024, ICIS data shows.· Group II values remain elevated versus Group I/III and VGO even as they slip from recent highs..· Firm prices follow steady rise in Group II base oils values in Q4 2023, when Europe’s Group II supply fundamentals were tighter.· Group II values remain elevated in Jan 2024 even amid signs of improving supply fundamentals, while demand faces typical seasonal slowdown.· Firm Group II values and improving availability raise prospect of growing disconnect between prices and fundamentals..· Firm Group II premium throughout Q4 2023 coincided with signs of tighter supply in Europe.· Europe’s Group II base oils supply fell to thirteen-month low in October 2023..· Europe’s November base oils imports from US fell to seven-month low, raising prospect of region’s Group II supply staying lower well into Q4 2023..· Prospect of tighter supply coincided with/supported surge in Europe’s Group II prices relative to other regions, attracting more shipments from those regions.· Europe’s Group II light-grade price premium to US export prices rose to more than $350/t in Q4 2023, up from less than $100/t at start of Q4 2023.· Europe’s Group II heavy-grade premium to US prices rose to more than $520/t in Q4 2023, after falling to a discount to US prices in Q3 2023..· Europe’s Group II heavy-grade price premium to Asia export prices rose to more than $500/t in Q4 2023, close to highest in a year.· Europe's Group II prices stay high vs other regions in early 2024 even amid signs of more balanced supply-demand fundamentals.· Europe Group II light-grade premium to US prices stays at more than $350/t in Jan 2024.· Europe Group II heavy-grade premium to US prices holds at more than $480/t in Jan 2024.· Europe Group II heavy-grade premium to Asia prices holds at more than $490/t in Jan 2024..· Still-high Group II price premium vs US/Asia prices coincides with prospect of pick-up in supplies from US.· US’ base oils exports to Europe surge to record-high levels in Nov 2023 after slowdown in shipments in preceding months..· Rise in shipments raises prospect of boosting Europe’s Group II base oils supply at end-2023/early 2024..· A rise in supply would coincide with a seasonal slowdown in regional demand at start of the year.· Firm Group II prices relative to other grades could add to pressure on demand for Group II base oils.· Europe’s Group II prices remain firm relative to Group I prices and Group III prices after rising steadily since start of Q4 2023..· Firm Group II values relative to Group I/III base oils incentivize blenders to boost consumption of other grades instead.· Any additional slowdown in demand would coincide with likely improvement in supply.· Any such change in fundamentals would coincide with Group II values that still reflect more the tighter fundamentals in Q4 2023 rather than the current state of the market in early 2024..Global base oils - week of Jan 22: Price outlook - margins
