· Global base oils values improve versus diesel/feedstock prices but remain unusually weak, especially for export prices, ICIS data shows.· Trend incentivizes refiners to cover domestic/regional term commitments, limit export shipments and remove any surplus supply.· Group III values extend slide versus diesel and feedstock prices, remain well above Group I/Group II values versus diesel.· Still-firm Group III premium to diesel curbs pressure on refiners to cut output in the same way as Group I/II refiners face pressure to cut output.· Asia Group I light/heavy neutrals export prices maintain discount to gasoil prices even as outright prices rise.· Group I light-grade prices maintain discount to gasoil prices for more than two months.· Asia Group II export prices revert to small premium to gasoil prices for first time in two months..· Still-weak base oil export values incentivize refiners to focus on diesel production, cut base oils output or target even higher prices.· China’s domestic Group II light-grade premium to Shandong diesel prices widens, holds in narrow range since early August close to lowest since Oct 2022..· Narrow base oils premium contrasts with relatively firm diesel premium to crude, curbing incentivize for domestic refiners to raise base oils output..· Europe’s domestic Group I heavy-grade premium to gasoil holds at lowest since Q2 2022.· Europe’s export Group I light-grade prices maintain discount to gasoil even as outright prices extend rebound.· Europe’s domestic Group I/II base oils prices extend slide vs VGO to lowest since Q1 2022; Group III values fall more steeply to lowest since Q2 2022..· Trend incentivizes refiners to prioritise domestic market and diesel production..· US Group II light-grade domestic prices rise versus heating oil, hold close to lowest since Q2 2022; export prices hold at discount to heating oil.· US Group III prices extend fall vs VGO to lowest since Q2 2022..· US Group II light-grade posted price premium to heating oil recovers to highest since end-June 2023, still unusually low..Global base oils - week of Sep 18: Price outlook - arbitrage
· Global base oils values improve versus diesel/feedstock prices but remain unusually weak, especially for export prices, ICIS data shows.· Trend incentivizes refiners to cover domestic/regional term commitments, limit export shipments and remove any surplus supply.· Group III values extend slide versus diesel and feedstock prices, remain well above Group I/Group II values versus diesel.· Still-firm Group III premium to diesel curbs pressure on refiners to cut output in the same way as Group I/II refiners face pressure to cut output.· Asia Group I light/heavy neutrals export prices maintain discount to gasoil prices even as outright prices rise.· Group I light-grade prices maintain discount to gasoil prices for more than two months.· Asia Group II export prices revert to small premium to gasoil prices for first time in two months..· Still-weak base oil export values incentivize refiners to focus on diesel production, cut base oils output or target even higher prices.· China’s domestic Group II light-grade premium to Shandong diesel prices widens, holds in narrow range since early August close to lowest since Oct 2022..· Narrow base oils premium contrasts with relatively firm diesel premium to crude, curbing incentivize for domestic refiners to raise base oils output..· Europe’s domestic Group I heavy-grade premium to gasoil holds at lowest since Q2 2022.· Europe’s export Group I light-grade prices maintain discount to gasoil even as outright prices extend rebound.· Europe’s domestic Group I/II base oils prices extend slide vs VGO to lowest since Q1 2022; Group III values fall more steeply to lowest since Q2 2022..· Trend incentivizes refiners to prioritise domestic market and diesel production..· US Group II light-grade domestic prices rise versus heating oil, hold close to lowest since Q2 2022; export prices hold at discount to heating oil.· US Group III prices extend fall vs VGO to lowest since Q2 2022..· US Group II light-grade posted price premium to heating oil recovers to highest since end-June 2023, still unusually low..Global base oils - week of Sep 18: Price outlook - arbitrage