· Global base oils prices extend fall vs competing/feedstock prices following surge in crude oil prices.· Rising diesel premium to crude oil magnifies pressure on base oils prices.· Speed of fall in base oils price differentials suggests surge in crude prices rather than weaker supply-demand fundamentals is key factor driving lower margins.· Any extension of base oils margins holding at lower levels would point to weaker supply-demand fundamentals also being a factor, limiting refiners’ leverage to adjust prices in response. .· FOB Asia base oils price-premium to Singapore gasoil extends fall..· FOB Asia Group I SN 150 price-differential to gasoil falls to discount for first time since Jan 2025.· FOB Asia Group II N150 premium to gasoil falls to lowest since Jan 2025 even after rise in outright prices.· Low price differentials incentivize refiners to cut output of light-grade base oils..· Domestic China N150 price premium to Shandong diesel prices stays low even as it rises from lowest in almost four months..· Still-low base oils price-premium likely to incentivize domestic refiners to focus on producing more diesel.· Outright base oils prices would need to extend rise to reverse that dynamic.· Lack of any such trend would point to weaker supply-demand fundamentals..· CFR India Group II N70 price-premium to Singapore gasoil extends slide to lowest level in more than five months..· Price-premium falls by more than $100/tonne so far in June 2025.· Speed of fall in price-premium complicates sales and procurement plans, closes arbitrage and incentivizes overseas refiners to produce more diesel instead.· Price-premium could face sustained pressure as buyers’ existing stocks and seasonal slowdown in demand curb pressure for them to accept higher prices..· Europe’s Group II heavy-grade price-premium to vacuum gasoil (VGO) falls to lowest since H1 April 2025..· Group II heavy-grade premium falls less steeply than Group II light-grade premium and Group I heavy-neutrals premium to VGO.· Smaller fall in Group II heavy-grade premium to VGO contrasts with steeper fall in Asia Group II heavy-grade premium to gasoil vs light grades.· Dynamic points to firmer supply-demand fundamentals for Group II heavy grades in Europe, and firmer fundamentals for light grades in Asia..· US Group II base oils export price-premium to VGO falls to lowest since early-April 2025..· US Group II export price-premium falls less steeply than fall in Group II domestic price-premium to VGO.· Fall in Group II export price-premium to VGO contrasts with sustained surge in export price-premium to VGO this time a year earlier, from end-March 2024 to H1 Sept 2024.· Any extension of trend would point to weaker supply-demand fundamentals in Q2 2025 than during same period last year..Asia base oils demand outlook: Week of 23 June.Asia base oils supply outlook: Week of 23 June.Base Oil News stories and analyses also available on the ICIS platform
