· Global base oils prices hold onto most of their recent gains vs gasoil/feedstock prices since 1H Sep 2023 even as they slip from recent highs, ICIS data shows.· Global domestic base oils values stay weak vs last two years, firm vs pre-2021 levels.· Global export prices stay weak vs diesel, especially for Group I in Europe and Asia, and Group II light grades in US.· Trend incentivizes refiners to focus on covering requirements in domestic markets and minimizing surplus volumes for export markets.· Seasonal slowdown in domestic demand in Americas/Europe in fourth quarter likely to free up surplus supplies that had been planned for domestic markets.· Lack of attraction of export market could incentivize refiners to cut output levels to curb surplus over coming months.· Fob Asia Group II prices maintain premium to gasoil close to highest since early July 2023.· Fob Asia Group I light-grade prices stay at discount to gasoil, heavy-neutrals maintain small premium to gasoil..· Group I prices especially deter refiners from producing additional supplies for export market.· China’s domestic Group II light-grade price premium to Shandong diesel prices hold firm close to highest since early July 2023, stay low vs 1H 2023 levels..· Firmer Group II values vs diesel could incentivize domestic refiners to divert less base oils feedstock or light-grades into diesel pool..· Europe’s Group I export light-grade prices slip back to discount to gasoil prices, stay firmer than Q3 2023 levels.· Europe’s Group I/II domestic light-grade price premium to VGO stays above mid-Sep 2023 lows, remains low vs 2021-2022 levels..· Low levels incentivize refiners to produce sufficient supplies to cover term commitments only..· US export Group II price premium to heating oil remains more than $200/t above lows in 2H Aug 2023.· US export Group II premium to heating oil holds firm vs levels throughout 2023, when levels have been unusually low.· US export Group II heavy-grade prices maintain steep premium to light grades, incentivizing refiners to maintain output if they can place the surplus light grades.· US domestic Group II light-grade values vs VGO trend higher but stay low vs 1H 2023 and 2021-2022.· US domestic Group III premium to VGO similarly trends higher from mid-Sep 2023 lows.· US domestic Group III premium to VGO stays unusually low vs 2021-1H 2023 levels, still firm vs pre-2021 levels..Global base oils - week of Oct 16: Demand outlook
· Global base oils prices hold onto most of their recent gains vs gasoil/feedstock prices since 1H Sep 2023 even as they slip from recent highs, ICIS data shows.· Global domestic base oils values stay weak vs last two years, firm vs pre-2021 levels.· Global export prices stay weak vs diesel, especially for Group I in Europe and Asia, and Group II light grades in US.· Trend incentivizes refiners to focus on covering requirements in domestic markets and minimizing surplus volumes for export markets.· Seasonal slowdown in domestic demand in Americas/Europe in fourth quarter likely to free up surplus supplies that had been planned for domestic markets.· Lack of attraction of export market could incentivize refiners to cut output levels to curb surplus over coming months.· Fob Asia Group II prices maintain premium to gasoil close to highest since early July 2023.· Fob Asia Group I light-grade prices stay at discount to gasoil, heavy-neutrals maintain small premium to gasoil..· Group I prices especially deter refiners from producing additional supplies for export market.· China’s domestic Group II light-grade price premium to Shandong diesel prices hold firm close to highest since early July 2023, stay low vs 1H 2023 levels..· Firmer Group II values vs diesel could incentivize domestic refiners to divert less base oils feedstock or light-grades into diesel pool..· Europe’s Group I export light-grade prices slip back to discount to gasoil prices, stay firmer than Q3 2023 levels.· Europe’s Group I/II domestic light-grade price premium to VGO stays above mid-Sep 2023 lows, remains low vs 2021-2022 levels..· Low levels incentivize refiners to produce sufficient supplies to cover term commitments only..· US export Group II price premium to heating oil remains more than $200/t above lows in 2H Aug 2023.· US export Group II premium to heating oil holds firm vs levels throughout 2023, when levels have been unusually low.· US export Group II heavy-grade prices maintain steep premium to light grades, incentivizing refiners to maintain output if they can place the surplus light grades.· US domestic Group II light-grade values vs VGO trend higher but stay low vs 1H 2023 and 2021-2022.· US domestic Group III premium to VGO similarly trends higher from mid-Sep 2023 lows.· US domestic Group III premium to VGO stays unusually low vs 2021-1H 2023 levels, still firm vs pre-2021 levels..Global base oils - week of Oct 16: Demand outlook