Global base oils – week of July 3: Price outlook – inter-grades

·        Europe heavy-grade premium to light grades narrows, especially for Group I base oils.

·        Europe Group II prices stay unusually competitive vs Group I prices.

·        Competitive Europe Group II prices, ready availability of Group II supplies and tighter availability of Group I base oils could incentive more widespread switch to the premium-grade base oils.

·        Increasingly steep premium of approved Group III base oils to unapproved Group III and to Group II base oils incentivizes blenders to minimize consumption of approved supplies.

·        Europe’s Group III 8cst premium to Group II heavy grades continues to narrow, incentivizing buyers to procure more Group III 8cst.

·        Asia Group I bright stock premium to SN 500 stays narrower; SN 500 premium to SN 150 narrows.

·        Asia Group II light-grade premium to Group I narrows, stays wider than usual.

·        US Group II heavy-grade premium to light grades stays wide, contrasting with Europe and Asia.

·        Wide gap between domestic and export base oils prices in most markets incentivizes refiners to focus on regional demand.