· Global base oils prices more mixed versus feedstock/competing fuel prices, with Europe values extending rise, US values holding steadier, and Asia Group II values slipping, ICIS data shows.· Still-firm premiums to VGO/diesel curb pressure on refiners to trim output at a time of year when demand is slowing.· Asia’s Group II base oils prices extend fall vs gasoil to lowest in almost two months, below average for the year..· Group II premium to gasoil falls more steeply than Group I base oils throughout Asia, domestic China and India markets.· Trend highlights diverging supply dynamics for Group I and Group II base oils..· China’s domestic Group II light-grade premium to diesel prices rises for second week..· Domestic base oils premium to diesel holds well above levels in Q3 2023, down from Dec 2022 levels.· Domestic base oils premium to diesel rebounded from late-Jan 2023 through rest of 1H 2023.· Domestic base oils premium in Dec 2023 shows signs of repeating that trend, even if at lower levels.· Trend would point to more balanced supply-demand fundamentals vs year-earlier levels..· Cfr India Group II N70 premium to gasoil resumes fall to lowest since early Oct 2023, slips below average for the year..· Ongoing slide in N70 premium could incentivize overseas refiners to redirect supplies into diesel pool instead..· Europe’s Group I/II base oils prices extend rise vs gasoil/VGO, incentivizing refiners to target the region with more supplies..· Any such rise in supplies would coincide with seasonal slowdown in demand.· Trend points to either tighter-than-expected supply-demand fundamentals, or prospect of rise in surplus supply.· Europe’s Group III 4cst (low) premium to VGO stays close to lowest since Q2 2022, holds well above typical levels before 2021..· US Group II export price premium to heating oil extends slide.· Strength of US Group II heavy-grade prices previously cushioned weakness of light-grade prices.· Simultaneous weakness of light and heavy-grade prices adds to pressure on US refiners to adjust output.· Increasingly steep premium of US Group II domestic prices to export prices supports firmer domestic values vs feedstock/competing fuel prices..· Trend could impact pace of any moves by refiners to adjust output, raising prospect of supply-build.· US Group III base oils premium to VGO holds in steadier range during Q4 2023, close to lowest since Q2 2022.· US Group III base oils premium to VGO stays well above Group II premium to VGO, even if down sharply since mid-2023..· Still-firm Group III premium likely maintains incentive for refiners to consider switching to produce Group III base oils instead of Group II.· US Group II posted prices maintain steep premium to domestic prices and feedstock prices.· Higher-than-usual posted price premium could incentivize blenders to hold back at a time of year when demand is already weak..Global base oils - week of Dec 11: Demand outlook
· Global base oils prices more mixed versus feedstock/competing fuel prices, with Europe values extending rise, US values holding steadier, and Asia Group II values slipping, ICIS data shows.· Still-firm premiums to VGO/diesel curb pressure on refiners to trim output at a time of year when demand is slowing.· Asia’s Group II base oils prices extend fall vs gasoil to lowest in almost two months, below average for the year..· Group II premium to gasoil falls more steeply than Group I base oils throughout Asia, domestic China and India markets.· Trend highlights diverging supply dynamics for Group I and Group II base oils..· China’s domestic Group II light-grade premium to diesel prices rises for second week..· Domestic base oils premium to diesel holds well above levels in Q3 2023, down from Dec 2022 levels.· Domestic base oils premium to diesel rebounded from late-Jan 2023 through rest of 1H 2023.· Domestic base oils premium in Dec 2023 shows signs of repeating that trend, even if at lower levels.· Trend would point to more balanced supply-demand fundamentals vs year-earlier levels..· Cfr India Group II N70 premium to gasoil resumes fall to lowest since early Oct 2023, slips below average for the year..· Ongoing slide in N70 premium could incentivize overseas refiners to redirect supplies into diesel pool instead..· Europe’s Group I/II base oils prices extend rise vs gasoil/VGO, incentivizing refiners to target the region with more supplies..· Any such rise in supplies would coincide with seasonal slowdown in demand.· Trend points to either tighter-than-expected supply-demand fundamentals, or prospect of rise in surplus supply.· Europe’s Group III 4cst (low) premium to VGO stays close to lowest since Q2 2022, holds well above typical levels before 2021..· US Group II export price premium to heating oil extends slide.· Strength of US Group II heavy-grade prices previously cushioned weakness of light-grade prices.· Simultaneous weakness of light and heavy-grade prices adds to pressure on US refiners to adjust output.· Increasingly steep premium of US Group II domestic prices to export prices supports firmer domestic values vs feedstock/competing fuel prices..· Trend could impact pace of any moves by refiners to adjust output, raising prospect of supply-build.· US Group III base oils premium to VGO holds in steadier range during Q4 2023, close to lowest since Q2 2022.· US Group III base oils premium to VGO stays well above Group II premium to VGO, even if down sharply since mid-2023..· Still-firm Group III premium likely maintains incentive for refiners to consider switching to produce Group III base oils instead of Group II.· US Group II posted prices maintain steep premium to domestic prices and feedstock prices.· Higher-than-usual posted price premium could incentivize blenders to hold back at a time of year when demand is already weak..Global base oils - week of Dec 11: Demand outlook