· Europe’s Group II prices maintain wide premium to US light-grade prices, wide premium to Asia heavy-grade prices.· Wide premium maintains incentive for refiners in US and Asia to target Europe and nearby markets with any surplus supplies.· Refiners face rising incentive to clear surplus in order to boost price leverage in face of sliding margins.· That incentive adds to attraction of targeting Europe with any surplus volumes.· Any significant drop in Europe’s Group II premium to US/Asia prices would point to oversupply in Europe or US/Asia producers cleared surplus.· Europe’s Group I export prices maintain steep premium to Asia prices.· Trend keeps shut arbitrage to move Europe Group I supplies to outlets like Mideast Gulf/India.· Trend sustains attraction of moving Asia Group I supplies to those markets instead.· Prolonged closure of Group I arbitrage from Europe since start of Q2 2023 suggests region avoided major supply-build even with closed arbitrage.· Trend suggests Europe’s Group I supply stays balanced-to-tight even with muted regional demand.· Asia’s Group II heavy-grade price discount to US prices widens, making more feasible the arbitrage to Americas.· Asia’s Group I bright stock discount to US prices widens even more, sustaining attraction of tapping that arbitrage.· China’s domestic Group I bright stock and Group II light/heavy price premium to fob Asia prices extends rise to widest in at least three months.· China’s firmer base oils prices versus fob Asia prices raise prospect of boosting attraction of moving more regional shipments to China.· Any such move would curb availability of surplus Asia-Pacific supplies for other more distant markets.· Any such trend would contrast with same time last year, when wave of Asia-Pacific shipments moved to more distant markets..Global base oils - week of July 31: Price outlook - margins
· Europe’s Group II prices maintain wide premium to US light-grade prices, wide premium to Asia heavy-grade prices.· Wide premium maintains incentive for refiners in US and Asia to target Europe and nearby markets with any surplus supplies.· Refiners face rising incentive to clear surplus in order to boost price leverage in face of sliding margins.· That incentive adds to attraction of targeting Europe with any surplus volumes.· Any significant drop in Europe’s Group II premium to US/Asia prices would point to oversupply in Europe or US/Asia producers cleared surplus.· Europe’s Group I export prices maintain steep premium to Asia prices.· Trend keeps shut arbitrage to move Europe Group I supplies to outlets like Mideast Gulf/India.· Trend sustains attraction of moving Asia Group I supplies to those markets instead.· Prolonged closure of Group I arbitrage from Europe since start of Q2 2023 suggests region avoided major supply-build even with closed arbitrage.· Trend suggests Europe’s Group I supply stays balanced-to-tight even with muted regional demand.· Asia’s Group II heavy-grade price discount to US prices widens, making more feasible the arbitrage to Americas.· Asia’s Group I bright stock discount to US prices widens even more, sustaining attraction of tapping that arbitrage.· China’s domestic Group I bright stock and Group II light/heavy price premium to fob Asia prices extends rise to widest in at least three months.· China’s firmer base oils prices versus fob Asia prices raise prospect of boosting attraction of moving more regional shipments to China.· Any such move would curb availability of surplus Asia-Pacific supplies for other more distant markets.· Any such trend would contrast with same time last year, when wave of Asia-Pacific shipments moved to more distant markets..Global base oils - week of July 31: Price outlook - margins
