· Global base oils prices stay firm vs feedstock/competing fuel prices.· Firm base oils margins point to tight supply and strong demand.· Firm base oils margins incentivize refiners to raise base oils output.· Base oils demand would need to hold firm or rise to absorb steady or higher output.· Any slowdown in demand could by contrast speed up pick-up in surplus supplies..· FOB Asia base oils prices edge down vs Singapore gasoil prices..· Base oils price-premium to gasoil remains unusually high for heavy-grade base oils.· High base oils premium suggests supply-demand fundamentals stay unusually strong for Group I and Group II base oils.· High base oils premium incentivizes refiners to maximise heavy-grade output.· Any moves to maximise output could speed up rise in surplus volumes if supply-demand fundamentals start to weaken.· High base oils premium coincides with expected completion of some Group II plant maintenance work in H2 April 2025..· China’s domestic Group II price light/heavy-grade price premiums to Shandong diesel price hold steadier at relatively firm levels, especially for heavy grades..· Recent price-strength points to firm supply-demand fundamentals.· Any easing of supply-demand fundamentals could remove underlying support for that price strength.· China’s base oils supply likely to improve following completion of plant maintenance work in May 2025..· CFR India Group II N70 price premium to Singapore gasoil falls from seven-month high..· Still-high premium keeps arbitrage open, incentivizes overseas refiners to produce more very-light grades for base oils market.· High premium and lower crude oil prices could prompt buyers in India to hold back in anticipation of further price correction.· Any such drop in outright prices could then support stronger domestic demand..· Europe’s Group III 4cSt base oils price premium to VGO extends rise to highest this year..· Group III price premium mirrors recent rise in Group II N150 price premium to VGO.· Group II N150 price premium remains in relatively narrow long-term range even with recent rise in premium.· Rise in Group III 4cSt premium follows sustained slide since mid-2023 and especially since Sept 2024.· Rise in Group III 4cSt premium points to signs that sustained slide has bottomed out..· US domestic Group II base oils price premium to VGO holds well above recent range..· Higher premium incentivizes refiners to maintain or raise base oils output.· Premium stays higher at time of year when it often gets boost from stronger supply-demand fundamentals.· Recent rise in premium instead coincides with signs of weaker-than-usual supply-demand fundamentals for the time of year.· Recent rise in premium likely reflects more this month’s sharp drop in crude oil prices.· Rise in premium because of lower crude prices rather than improved fundamentals could speed up build-up of surplus supplies..Asia base oils demand outlook: Week of 21 April.Asia base oils supply outlook: Week of 21 April
· Global base oils prices stay firm vs feedstock/competing fuel prices.· Firm base oils margins point to tight supply and strong demand.· Firm base oils margins incentivize refiners to raise base oils output.· Base oils demand would need to hold firm or rise to absorb steady or higher output.· Any slowdown in demand could by contrast speed up pick-up in surplus supplies..· FOB Asia base oils prices edge down vs Singapore gasoil prices..· Base oils price-premium to gasoil remains unusually high for heavy-grade base oils.· High base oils premium suggests supply-demand fundamentals stay unusually strong for Group I and Group II base oils.· High base oils premium incentivizes refiners to maximise heavy-grade output.· Any moves to maximise output could speed up rise in surplus volumes if supply-demand fundamentals start to weaken.· High base oils premium coincides with expected completion of some Group II plant maintenance work in H2 April 2025..· China’s domestic Group II price light/heavy-grade price premiums to Shandong diesel price hold steadier at relatively firm levels, especially for heavy grades..· Recent price-strength points to firm supply-demand fundamentals.· Any easing of supply-demand fundamentals could remove underlying support for that price strength.· China’s base oils supply likely to improve following completion of plant maintenance work in May 2025..· CFR India Group II N70 price premium to Singapore gasoil falls from seven-month high..· Still-high premium keeps arbitrage open, incentivizes overseas refiners to produce more very-light grades for base oils market.· High premium and lower crude oil prices could prompt buyers in India to hold back in anticipation of further price correction.· Any such drop in outright prices could then support stronger domestic demand..· Europe’s Group III 4cSt base oils price premium to VGO extends rise to highest this year..· Group III price premium mirrors recent rise in Group II N150 price premium to VGO.· Group II N150 price premium remains in relatively narrow long-term range even with recent rise in premium.· Rise in Group III 4cSt premium follows sustained slide since mid-2023 and especially since Sept 2024.· Rise in Group III 4cSt premium points to signs that sustained slide has bottomed out..· US domestic Group II base oils price premium to VGO holds well above recent range..· Higher premium incentivizes refiners to maintain or raise base oils output.· Premium stays higher at time of year when it often gets boost from stronger supply-demand fundamentals.· Recent rise in premium instead coincides with signs of weaker-than-usual supply-demand fundamentals for the time of year.· Recent rise in premium likely reflects more this month’s sharp drop in crude oil prices.· Rise in premium because of lower crude prices rather than improved fundamentals could speed up build-up of surplus supplies..Asia base oils demand outlook: Week of 21 April.Asia base oils supply outlook: Week of 21 April
