· Global base oils prices extend slide vs feedstock and competing-fuel prices even as some outright prices rise, ICIS data shows.· Trend reflects impact of even steeper rise in feedstock and diesel prices.· Trend leaves light and heavy-neutrals export prices in Europe and Asia and light-grade prices in US at close to or at discount to diesel prices.· Base oils prices at prolonged discount to diesel incentivize refiners to cut production and focus on middle distillates instead.· Fob Asia Group I and Group II light/heavy neutrals prices hold at discount to gasoil prices even after rise in outright prices..· China’s domestic Group II light-grade premium to Shandong diesel prices edges lower, holds close to lowest in almost a year..· Low base oil premium to diesel and firm diesel premium to crude incentivizes China’s refiners to produce more diesel instead.· Pick-up in domestic base oils output in September likely to put further pressure on base oils margins and curb refiners’ leverage to raise prices..· Europe’s Group I export light/heavy-neutrals values hold close to or at discount to diesel prices even after rise in outright prices.· Europe’s domestic Group I light-grade price-premium to gasoil falls close to seven-month low.· Europe’s domestic Group I light-grade price-premium to VGO falls to five-month low..· Europe’s Group II premium to gasoil falls to lowest in more than a year.· Europe’s Group II light-grade premium to VGO falls to lowest since March 2022. · Europe’s Group III premium to gasoil falls to lowest in a year; premium to VGO falls to lowest in more than a year..· US export Group II light-grade prices maintain steep discount to heating oil; heavy-grade premium close to lowest in more than a year.· US domestic Group II light-grade prices barely maintain premium to heating oil prices.· US domestic Group II light-grade premium to VGO falls to lowest since Q1 2022; Group III premium to VGO falls to lowest since Q2 2022..· Several US refiners’ announced posted-price increases last week leaves premium to heating oil barely higher than at end-July 2023, reflecting pressure of rising distillates and feedstock prices..Global base oils - week of Sep 11: Demand outlook.Base Oil News stories and analysis also available on ICIS platform
