· Global base oils prices mostly fall relative to feedstock/competing fuel prices, with export values under more pressure.· Even at lower levels, price-differentials mostly hold at levels that sustain incentive for refiners to maintain output of most base oils grades..· FOB Asia base oils cargo prices hold steady versus Singapore gasoil..· Light-grade price-premium to gasoil stays lower than in Q2 2025, curbing incentive for refiners to raise output even amid signs of tighter fundamentals.· Group II heavy-grade price-premium stays lower than in Q2 2025 but at historically firm levels, curbing incentive for refiners to cut output even amid signs of surplus supply.· Group I heavy-grade premium to gasoil mirrors similar trend to Group II heavy grades, curbing incentive for refiners to cut output.· But Group I heavy-grade base oils fundamentals avoid signs of surplus supply that Group II heavy-grade market faces..· China’s domestic Group II N150 price-premium to Shandong diesel price holds steady and low in narrow range, well below year-earlier levels..· Low price-premium points to slack supply-demand fundamentals, incentivizes domestic refiners to trim output..· CFR India Group II N70 price-premium to Singapore gasoil rises, holds in narrower range since late-June 2025..· Price-premium holds at level that keeps open arbitrage to move more supplies to India.· Price-premium stays well below levels in Q2 2025, when plant-maintenance work in Asia trimmed supply.· Dynamic points to demand that remains firm but lower than in recent months..· Europe’s domestic Group I SN 150 price-premium to vacuum gasoil (VGO) falls to lowest in more than a month..· Europe’s Group II light-grade price-premium similarly falls to lowest in more than a month, with pace of drop sharper than Group I base oils.· Lower price-premiums coincide with time of year when supply-demand fundamentals typically soften.· Price-premiums hold at levels that sustain incentive for refiners to maintain steady output.· Smaller size of drop in Group I price-premium versus Group II base oils could point to more muted weakness for Group I base oils.· Even so, widening discount of Group I light-grade export prices to domestic prices points to rising surplus supply of Group I light grades..· US Group II export-price premium to VGO falls to lowest since Q1 2025, when supply-demand fundamentals faced typical seasonal weakness..· Sustained dip in export-price premium in recent weeks points to further weakness of supply-demand fundamentals.· Any extension of fall in price-differentials would break export price-premium out of relatively narrow range it has held in since late-2024.· Any such move could incentivize refiners to adjust output in response.· Any stabilization of export price-premium at current levels could instead curb urgency for refiners to implement any such moves to adjust output..Asia base oils demand outlook: Week of 4 August.Asia base oils supply outlook: Week of 4 August.Base Oil News stories and analyses also available on the ICIS platform
