· Europe Group II prices maintain steep premium to US/Asia prices, especially for heavy grades.· Trend boosts attraction of moving more US/Asia shipments to the region.· Europe Group I price premium to Asia prices at widest since October 2022 – opening arbitrage opportunities to move cargoes to outlets that Europe spot shipments typically target.· Europe’s higher Group I base oils prices add to incentive for Chinese and Indian refiners to produce more supplies for domestic consumption and for export markets.· Wide Europe premium unlikely to attract Asia Group I supplies to Europe in view of limited surplus supply in Asia.· Wide Europe premium could attract more Group I supplies to Europe from Saudi Arabia.· Wide Europe Group I/II price premium to other markets adds to attraction of locating lubricants production in markets like Mideast Gulf, which benefits from arbitrage flows from Asia and US.· Higher Europe prices likely to boost demand in Turkey for Group I supplies of Russian origin.· Firm Europe Group III prices vs US/Asia likely to attract more premium-grade supplies to Europe.· More competitive US prices complicate arbitrage to move Group II prices from Asia to Americas, including for heavy grades.· Less feasible arbitrage contrasts with last year, when open arbitrage supported wave of Asia-Pacific shipments to Americas.· Fob Asia Group II prices maintain premium to domestic Chinese prices, keeping arbitrage shut.· Firmer Asia prices and muted Chinese demand incentivizes term buyers in China to redirect regional shipments to other markets to enjoy larger profit and avoid locking in loss.· Fob Asia Group I bright stock discount to domestic Chinese prices remains narrow, complicating arbitrage unless cargoes offered at discounted prices or Chinese prices rise..Global base oils – week of June 26: Price outlook - margins
· Europe Group II prices maintain steep premium to US/Asia prices, especially for heavy grades.· Trend boosts attraction of moving more US/Asia shipments to the region.· Europe Group I price premium to Asia prices at widest since October 2022 – opening arbitrage opportunities to move cargoes to outlets that Europe spot shipments typically target.· Europe’s higher Group I base oils prices add to incentive for Chinese and Indian refiners to produce more supplies for domestic consumption and for export markets.· Wide Europe premium unlikely to attract Asia Group I supplies to Europe in view of limited surplus supply in Asia.· Wide Europe premium could attract more Group I supplies to Europe from Saudi Arabia.· Wide Europe Group I/II price premium to other markets adds to attraction of locating lubricants production in markets like Mideast Gulf, which benefits from arbitrage flows from Asia and US.· Higher Europe prices likely to boost demand in Turkey for Group I supplies of Russian origin.· Firm Europe Group III prices vs US/Asia likely to attract more premium-grade supplies to Europe.· More competitive US prices complicate arbitrage to move Group II prices from Asia to Americas, including for heavy grades.· Less feasible arbitrage contrasts with last year, when open arbitrage supported wave of Asia-Pacific shipments to Americas.· Fob Asia Group II prices maintain premium to domestic Chinese prices, keeping arbitrage shut.· Firmer Asia prices and muted Chinese demand incentivizes term buyers in China to redirect regional shipments to other markets to enjoy larger profit and avoid locking in loss.· Fob Asia Group I bright stock discount to domestic Chinese prices remains narrow, complicating arbitrage unless cargoes offered at discounted prices or Chinese prices rise..Global base oils – week of June 26: Price outlook - margins
