· 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.
