US Group II base oil margins mixed, prices steady

: Oil products
24/11/26

US Group II base oil margins over feedstocks and competing fuels were mixed for the week ended 22 November because feedstocks fell and fuels rose.

Base oil spot prices were steady because surplus availability tightened for the domestic market.

The Argus US domestic spot Group II N100 premium to four-week average low-sulphur vacuum gas oil (VGO) rose to $1.12/USG, up from $1.11/USG last week. Margins remained below year-earlier totals of $1.42/USG.

The Argus US domestic spot Group II N100 premium to four-week average US Gulf coast diesel fell to 91¢/USG from 93¢ a week prior. Margins remained above year-earlier totals of 82¢/USG.

Domestic Group II light- and heavy-grade spot prices were steady as surplus availability decreased.

Market participants are still able to find Group II+ re-refined material at a discount to virgin N100, which is putting a ceiling on N100 prices. Some blenders are seeing re-refined prices stabilize as several producers came back from or are preparing for turnarounds.

Four-week average feedstock VGO prices declined because weaker crude values outweighed firmer margins for VGO relative to crude. VGO margins rose because supply tightness outweighed continued weak margins for fuel production.

The low-sulphur VGO premium to four-week average WTI crude widened to $12.16/USG from $12.06/USG last week.

Refiners are still pushing available VGO supplies toward base oils as competing fuel margins remain thin.

By Karly Lamm

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