· Global base oils prices face growing upward pressure versus feedstock/diesel prices following slump in crude oil prices.· Firming base oils premium points to tightening supply and rising demand, incentivizing refiners to maintain or raise output.· Recent slump in crude oil prices reflects concern about slowdown in global economic activity and subsequent drop in demand.· Any moves to maintain or raise base oils output could trigger larger supply-surplus if demand lags earlier expectations..· FOB Asia base oils price premium to Singapore gasoil resumes rise, keeping Group I values especially unusually high..· Rising premium points to even tighter supply and firmer demand fundamentals than in recent weeks, when lube consumption faced seasonal peak in month of March.· Rising premium incentivizes refiners to maintain or raise base oils output at a time when sliding crude oil prices signal concerns about falling demand..· China’s domestic base oils prices strengthen vs Shandong diesel prices, especially for Group I base oils..· Rising base oils premium points to increasingly firm supply-demand fundamentals.· Even steeper rise in Group I base oils premium could suggest domestic plant maintenance work is impacting Group I supplies more than Group II supplies..· CFR India Group II N70 premium to Singapore gasoil rises, ending slide in H2 March 2025..· Premium likely to face more upward pressure from weaker gasoil prices.· Firm base oils premium keeps arbitrage open to move more supplies to India, sustains incentive for overseas refiners to keep very-light grades in base oils pool..· Europe’s base oils price premium to VGO likely to get boost from slump in crude oil prices.· A rise in price premiums would follow similar rise in Q2 2024..· A rising price premium and speed of slide in crude oil prices could dampen any upward pressure on outright prices for products like Group I base oils..· US Group II base oils price premium to VGO could break out of its relatively narrow range so far this year following slump in crude oil prices..· Narrow range of Group II base oils premium to VGO this year contrasts with slump in premium in Q1 2024, followed by rebound in premium in Q2 2024 amid tighter supply-demand fundamentals.· A break-out above recent rangebound levels in coming weeks could point to similar tightening of supply-demand fundamentals.· A break-out above recent rangebound levels could instead reflect impact of lower crude oil prices that outweighs supply-demand fundamentals that remain relatively weak.· Any such disconnect between firmer base oils margins and still-weak supply-demand fundamentals could curb upward pressure on prices.· Any improvement in base oils margins could incentivize refiners to maintain or raise output.· Any extension or acceleration of weaker-than-usual seasonal demand dynamics could then widen any imbalance between supply and demand..Asia base oils demand outlook: Week of 7 April.Asia base oils supply outlook: Week of 7 April
· Global base oils prices face growing upward pressure versus feedstock/diesel prices following slump in crude oil prices.· Firming base oils premium points to tightening supply and rising demand, incentivizing refiners to maintain or raise output.· Recent slump in crude oil prices reflects concern about slowdown in global economic activity and subsequent drop in demand.· Any moves to maintain or raise base oils output could trigger larger supply-surplus if demand lags earlier expectations..· FOB Asia base oils price premium to Singapore gasoil resumes rise, keeping Group I values especially unusually high..· Rising premium points to even tighter supply and firmer demand fundamentals than in recent weeks, when lube consumption faced seasonal peak in month of March.· Rising premium incentivizes refiners to maintain or raise base oils output at a time when sliding crude oil prices signal concerns about falling demand..· China’s domestic base oils prices strengthen vs Shandong diesel prices, especially for Group I base oils..· Rising base oils premium points to increasingly firm supply-demand fundamentals.· Even steeper rise in Group I base oils premium could suggest domestic plant maintenance work is impacting Group I supplies more than Group II supplies..· CFR India Group II N70 premium to Singapore gasoil rises, ending slide in H2 March 2025..· Premium likely to face more upward pressure from weaker gasoil prices.· Firm base oils premium keeps arbitrage open to move more supplies to India, sustains incentive for overseas refiners to keep very-light grades in base oils pool..· Europe’s base oils price premium to VGO likely to get boost from slump in crude oil prices.· A rise in price premiums would follow similar rise in Q2 2024..· A rising price premium and speed of slide in crude oil prices could dampen any upward pressure on outright prices for products like Group I base oils..· US Group II base oils price premium to VGO could break out of its relatively narrow range so far this year following slump in crude oil prices..· Narrow range of Group II base oils premium to VGO this year contrasts with slump in premium in Q1 2024, followed by rebound in premium in Q2 2024 amid tighter supply-demand fundamentals.· A break-out above recent rangebound levels in coming weeks could point to similar tightening of supply-demand fundamentals.· A break-out above recent rangebound levels could instead reflect impact of lower crude oil prices that outweighs supply-demand fundamentals that remain relatively weak.· Any such disconnect between firmer base oils margins and still-weak supply-demand fundamentals could curb upward pressure on prices.· Any improvement in base oils margins could incentivize refiners to maintain or raise output.· Any extension or acceleration of weaker-than-usual seasonal demand dynamics could then widen any imbalance between supply and demand..Asia base oils demand outlook: Week of 7 April.Asia base oils supply outlook: Week of 7 April
