· Global base oils values mostly hold firm versus feedstock/competing fuel prices, even as they remain down from recent highs in Q2 2025.· Firm base oils margins coincide with strong diesel premium to crude oil that incentivizes refiners to boost output of the motor fuel.· Any such move would likely impact light-grade base oils more than heavy grades, whose firm margins incentivize refiners to maintain high output of the product.· Base oils margins mostly hold firm at a time of year when demand faces a seasonal slowdown in all the key consumption markets over the coming weeks..· FOB Asia base oils price-premium to Singapore gasoil edges lower, holding well below recent highs in April-May 2025..· Lower price-premium could have more impact on light grades, especially Group I base oils, whose price-differential barely maintains premium to gasoil.· Recent strength of diesel price relative to crude could add to pressure on light grades by incentivizing refiners to produce more of the motor fuel instead..· China’s domestic Group II N150 price premium to Shandong diesel prices stays close to multi-month low..· Price-premium stays low at time of year when demand faces seasonal slowdown, while supply is likely to rise.· Low price-premium contrasts with surge in domestic price-premium of imported N150 base oils over Shandong diesel prices.· Rising premium points to firmer fundamentals for imported supplies.· Dynamic points to diverging fundamentals for domestic and imported supplies..· India’s CFR Group II N70 price-premium to Singapore gasoil price steadies at firm level, even if down from recent highs in three months to end-May 2025..· Lack of recovery to those recent highs could reflect weaker fundamentals at a time when demand usually faces seasonal slowdown and supply is likely to rise.· Price-premium holds at level that supports arbitrage shipments to India and incentivizes Asia refiners to maintain higher output of very-light grades..· Europe’s Group II base oils price-premium to vacuum gasoil (VGO) extends rise, especially for heavy grades..· Group II price-premium to VGO rises faster than other base oils grades in Europe, and faster than Group II base oils in other regions.· Outperformance of Group II price-premium points to increasingly firm supply-demand fundamentals.· Outperformance of Group II base oils incentivizes regional refiners to boost output of the grade, and overseas refiners to move more shipments to Europe..· US Group II export base oils price-premium to VGO holds steady at start of Q3 2025..· Steady price-differentials contrasts with ongoing rise in Group II price-premium in Q3 2024.· Steadier price-differentials coincide with feasible arbitrage to markets like Europe and India, especially for heavy grades.· Steadier price-differentials could reflect benefit of feasible arbitrage that helps to keep domestic supplies more balanced.· Any rise in price-differentials to VGO, or a less feasible arbitrage, could change those dynamics that support more balanced supplies..Asia base oils demand outlook: Week of 7 July.Asia base oils supply outlook: Week of 7 July.Global base oils margins outlook: Week of 30 June
· Global base oils values mostly hold firm versus feedstock/competing fuel prices, even as they remain down from recent highs in Q2 2025.· Firm base oils margins coincide with strong diesel premium to crude oil that incentivizes refiners to boost output of the motor fuel.· Any such move would likely impact light-grade base oils more than heavy grades, whose firm margins incentivize refiners to maintain high output of the product.· Base oils margins mostly hold firm at a time of year when demand faces a seasonal slowdown in all the key consumption markets over the coming weeks..· FOB Asia base oils price-premium to Singapore gasoil edges lower, holding well below recent highs in April-May 2025..· Lower price-premium could have more impact on light grades, especially Group I base oils, whose price-differential barely maintains premium to gasoil.· Recent strength of diesel price relative to crude could add to pressure on light grades by incentivizing refiners to produce more of the motor fuel instead..· China’s domestic Group II N150 price premium to Shandong diesel prices stays close to multi-month low..· Price-premium stays low at time of year when demand faces seasonal slowdown, while supply is likely to rise.· Low price-premium contrasts with surge in domestic price-premium of imported N150 base oils over Shandong diesel prices.· Rising premium points to firmer fundamentals for imported supplies.· Dynamic points to diverging fundamentals for domestic and imported supplies..· India’s CFR Group II N70 price-premium to Singapore gasoil price steadies at firm level, even if down from recent highs in three months to end-May 2025..· Lack of recovery to those recent highs could reflect weaker fundamentals at a time when demand usually faces seasonal slowdown and supply is likely to rise.· Price-premium holds at level that supports arbitrage shipments to India and incentivizes Asia refiners to maintain higher output of very-light grades..· Europe’s Group II base oils price-premium to vacuum gasoil (VGO) extends rise, especially for heavy grades..· Group II price-premium to VGO rises faster than other base oils grades in Europe, and faster than Group II base oils in other regions.· Outperformance of Group II price-premium points to increasingly firm supply-demand fundamentals.· Outperformance of Group II base oils incentivizes regional refiners to boost output of the grade, and overseas refiners to move more shipments to Europe..· US Group II export base oils price-premium to VGO holds steady at start of Q3 2025..· Steady price-differentials contrasts with ongoing rise in Group II price-premium in Q3 2024.· Steadier price-differentials coincide with feasible arbitrage to markets like Europe and India, especially for heavy grades.· Steadier price-differentials could reflect benefit of feasible arbitrage that helps to keep domestic supplies more balanced.· Any rise in price-differentials to VGO, or a less feasible arbitrage, could change those dynamics that support more balanced supplies..Asia base oils demand outlook: Week of 7 July.Asia base oils supply outlook: Week of 7 July.Global base oils margins outlook: Week of 30 June
