· Global base oils prices mostly hold firm versus feedstock/competing fuel prices amid further drop in crude oil prices.· Mostly-steady outright base oils prices and lower crude prices cushion impact of strong gasoil premium to crude oil.· Strong gasoil crack-spread incentivizes any refinery moves to trim output levels to focus more on light grades than heavy grades.· Margins that incentivize steady or higher heavy-grade output coincides with time of year when demand typically slows.· FOB Asia heavy-neutrals base oils prices continue to trend lower vs Singapore gasoil, while light-grade price-differentials hold in narrower range..· Heavy-grade price margins face pressure from persistent surplus supply.· Heavy/light-grade base oils margins continue to face pressure from firm gasoil premium to crude oil.· Still-steep premium of Group II heavy grades over light grades incentivizes refiners to focus any output-changes on light grades rather than heavy grades.· Any such moves would compound current supply-demand imbalance between light and heavy grades.· Domestic China Group II N150 price-premium to Shandong diesel holds steadier..· Steadier N150 price-premium stays slightly below highs of H1 Sept 2025.· Steadier N150 price-premium to diesel contrasts with sharp fall in price-premium from end-Sept 2024..· Steadier price-premium this year could point to more balanced supply-demand fundamentals despite high domestic output in Aug-Sept 2025.· Dynamic could point to firmer demand or to impact of some domestic plant-maintenance work in early-Q4 2025, or to combination of both.· Either way, steadier price-premium curbs incentive for refiners to trim output.· CFR India Group II N70 price-premium to Singapore gasoil holds firm, pointing to strong demand and balanced-to-tight supply..· N70 price-premium holds at level that makes feasible the arbitrage to move supplies from Asia to India.· Strong gasoil premium to crude oil could still incentivize Asia refiners to focus more on diesel production instead of light-grade base oils.· Firm N70 price-premium to gasoil/heating oil, and any sustained slowdown in US shipments to Mexico, could boost incentive to move more of those supplies to India.· Europe Group III 4cSt (low) price-premium to fuel oil holds firm after sustained rebound since early-2025..· Rise in Group III price-premium far outpaces firm Group II light-grade price-premium to fuel oil.· Firm Group III price-premium points to increasingly strong fundamentals versus Group II base oils, incentivizes suppliers to boost regional output or move more shipments to Europe.· US Group II light-grade domestic base oils prices remain in narrow range vs vacuum gasoil (VGO)..· Relative narrowness of price-range so far this year contrasts with more volatile spot and posted-price margins in 2023 and 2024.· Stability of price margins points to more balanced supply-demand fundamentals this year compared with 2023-2024.· Stability of price margins incentivizes refiners to maintain high output, with expectations of sufficient domestic or overseas demand to absorb the supplies..Asia base oils demand outlook: Week of 13 October.Global base oils margins outlook: Week of 6 October.Base Oil News stories and analysis also available on ICIS platform
