· Europe Group II premium to US/Asia prices continues to rise to widest level since start of year for some grades, to widest in more than a year for other grades.· Widening premium incentivizes sellers to lock in sales and direct any surplus volumes to Europe.· Wide premium could be short-lived if overseas refiners adjust output in a way that supports firmer prices or if European prices fall.· Wide Europe premium to other markets insinuates Europe requires additional volumes to cover requirements.· Europe Group III prices hold at levels that incentivize refiners to move more supplies to the region rather than to US.· Narrowing Europe Group III premium to Asia prices could deter flow of surplus supplies from that region to Europe.· Europe Group I prices maintain firm premium to Asia prices – incentivizing buyers in markets like India and Mideast Gulf to seek additional volumes from Asia.· Trend suggests Europe Group I market has scant surplus volumes that need clearing in overseas markets.· Asia’s Group II heavy-grade price discount to US prices widens further, making arbitrage more attractive again.· Asia’s Group I bright stock discount to US prices continues to widen.· Trend likely to sustain steady flow of Asia shipments of bright stock to Americas markets.· Asia’s Group I bright stock discount to domestic Chinese prices moves to widest in more than two months.· Discount stays below levels at start of 2023, but arbitrage more feasible than in recent weeks.· Asia Group II light-grade discount to domestic Chinese prices moves to widest in almost three months, boosting feasibility of arbitrage to China.· Relative strength of domestic Chinese prices vs Asia prices suggests China’s supply-demand fundamentals are improving relative to Asia market..Global base oils - week of July 24: Price outlook - margins
· Europe Group II premium to US/Asia prices continues to rise to widest level since start of year for some grades, to widest in more than a year for other grades.· Widening premium incentivizes sellers to lock in sales and direct any surplus volumes to Europe.· Wide premium could be short-lived if overseas refiners adjust output in a way that supports firmer prices or if European prices fall.· Wide Europe premium to other markets insinuates Europe requires additional volumes to cover requirements.· Europe Group III prices hold at levels that incentivize refiners to move more supplies to the region rather than to US.· Narrowing Europe Group III premium to Asia prices could deter flow of surplus supplies from that region to Europe.· Europe Group I prices maintain firm premium to Asia prices – incentivizing buyers in markets like India and Mideast Gulf to seek additional volumes from Asia.· Trend suggests Europe Group I market has scant surplus volumes that need clearing in overseas markets.· Asia’s Group II heavy-grade price discount to US prices widens further, making arbitrage more attractive again.· Asia’s Group I bright stock discount to US prices continues to widen.· Trend likely to sustain steady flow of Asia shipments of bright stock to Americas markets.· Asia’s Group I bright stock discount to domestic Chinese prices moves to widest in more than two months.· Discount stays below levels at start of 2023, but arbitrage more feasible than in recent weeks.· Asia Group II light-grade discount to domestic Chinese prices moves to widest in almost three months, boosting feasibility of arbitrage to China.· Relative strength of domestic Chinese prices vs Asia prices suggests China’s supply-demand fundamentals are improving relative to Asia market..Global base oils - week of July 24: Price outlook - margins