· Global base oils prices extend recovery vs feedstock/competing fuel prices, especially in Asia.· Any extension of recovery in base oils premiums would leave margins bottoming out in Q1 2025 earlier than in Q1 2024.· Dynamic would point to balanced-to-tighter supply-demand fundamentals earlier this year than in Q1 2024..· FOB Asia base oils prices rise strongly vs Singapore gasoil prices.· FOB Asia Group I brightstock premium to gasoil rises to highest in more than three years..· Fob Asia light-grade differentials also rebound strongly, rising higher than year-earlier levels.· Rising light/heavy-grade price differentials point to increasingly firm supply-demand fundamentals, suggest any recent weakness has passed..· China’s domestic Group II N150 premium to Shandong diesel prices continues to edge lower, contrasts with higher levels the same time a year earlier..· Lower and falling price premium points to weaker fundamentals compared with same time a year earlier, at a time of year when demand typically gets a seasonal boost..· CFR India Group II N70 premium to Singapore gasoil price extends sharp recovery to highest this year..· Sustained rebound in N70 premium coincides with India’s still-high domestic diesel premium to CFR India N70 premium.· High domestic premium to Group II N70 typically coincides with stronger demand for very-light grade base oils.· Rising CFR India N70 premium to Singapore gasoil makes arbitrage more feasible for Asia-Pacific refiners, boosts incentive to produce more base oils instead of diesel..· Europe’s Group I export base oils price premium to VGO extends recovery after bottoming out in mid-Jan 2025..· Any extension of trend would point to export price premium bottoming out in Q1 2025 at higher level than in Q1 2024.· Dynamic would add to signs of firmer supply-demand fundamentals this year vs Q1 2024..· US Group II N100/120 export price premium to VGO steadies after sustained fall since Sept 2024..· Export price-premium steadies at higher level than same time a year-earlier, mirroring similar trend in Europe.· US domestic Group II N100/120 price premium to VGO steadies at similar level to year-earlier levels.· Weaker performance of domestic Group II N100/120 price differential vs Group II export price differential could point to firmer supply-demand fundamentals in export market.· Low US Group II price differentials vs VGO contrast with increasingly firm heating oil premium to crude oil, sustaining incentive for refiners to prioritise output of middle distillates..Asia base oils demand outlook: Week of 10 Feb.Asia base oils supply outlook: Week of 10 Feb.Base Oil News stories and analyses also available on the ICIS platform
