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US Group II base oil margins rise, prices flat

  • Spanish Market: Oil products
  • 10/12/24

US Group II base oil margins rose because feedstock and competing fuel costs fell while spot prices held steady.

The Argus domestic spot US Group II N100 premium to four-week average low-sulphur vacuum gasoil (VGO) rose to $1.12/USG from $1.11/USG last week. Margins remained below year-earlier levels of $1.37/USG.

The Argus domestic spot US Group II N100 premium to four-week average US Gulf coast diesel was 92¢/USG, up from 90¢/USG a week earlier. Margins also rose above year-earlier levels of 90¢/USG.

Group II spot prices were steady last week because refiners were not interested in dropping prices further as buying demand remains weak.

Excel Paralubes' 22,200 b/d base oil unit in Westlake, Louisiana, was also still down for an unplanned maintenance which curbed some downward pressure on growing supplies.

Group II mid-viscosity grade supplies are ample while light- and -heavy grades are balanced.

Four-week average feedstock VGO prices fell on lower crude values and weaker fluid catalytic cracker (FCC) margins. Tighter VGO supplies continued to mitigate some of this downward pressure, keeping demand stable.

The low-sulphur VGO premium to four-week average WTI crude widened to $12.63/USG, up from $12.44/USG last week.

Refiners continue to push more VGO towards base oil production because of weaker competing fuel margins. While base oil demand is lackluster, it remains at a premium to fuels such as gasoline and diesel.


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03/02/25

US delays Mexico tariffs by a month: Update

US delays Mexico tariffs by a month: Update

Adds comments from press conference, White House response, historic context. Mexico City, 3 February (Argus) — The US has agreed to postpone the 4 February implementation of 25pc tariffs on Mexican goods by one month to allow more time for negotiations, President Claudia Sheinbaum said today. Under an agreement with the US, Mexico will immediately reinforce its border with the US with 10,000 national guard troops to limit drug trafficking into the US, with a specific focus on fentanyl, Sheinbaum posted on social media platform X. The US pledged to take stronger action to curb the flow of high-powered firearms into Mexico, she said. The pause will allow "Mexico time to demonstrate good results for the US people and our people" on key security concerns, Sheinbaum said. US president Donald Trump confirmed the tariff delay in a social media post, saying there would be negotiations in the coming weeks with Mexican officials and US secretary of state Marco Rubio, secretary of the treasury Scott Bessent and secretary of commerce Howard Lutnick. The White House praised Mexico's willingness to respond positively to the tariff threats, while characterizing the Canadian response as [a] misunderstanding. "The good news is that in our conversations over the weekend, one of the things we've noticed is that Mexicans are very, very serious about doing what President Trump said," White House National Economic Council director Kevin Hassett said in a broadcast interview. Canada had "misunderstood the plain language of the executive order and they're interpreting it as a trade war." Trump said this morning that he "looks forward to negotiations" with Sheinbaum to reach a deal between the countries. He is also talking to Canadian premier Justin Trudeau later today. The announcements today do not address Trump's complaints of a trade deficit with Mexico, which Sheinbaum said during a press conference today the US misinterprets as a negative. Both the US and Mexico benefit from the region becoming more competitive, she said. Mexico will also keep its retaliatory tariffs on the table: "We will save Plan B for later, if necessary," Sheinbaum said. The current tensions are similar to those from 2019, when Trump threatened to impose 5pc tariffs on all Mexican goods. He relented when former president Andres Manuel Lopez Obrador said Mexico would deploy 21,000 national guard troops to contain the flow of migrants toward the US. If the tariffs were implemented, it would disrupt the energy trade between the US and Mexico. Nearly all of Mexico's roughly 500,000 b/d of crude shipments to the US in January-November 2024 were waterborne cargoes sent to US Gulf coast refiners. Those shipments in the future could be diverted to Asia or Europe. Mexico also imports much of its road fuels and LPG from the US. But the country is unlikely to hit these goods with retaliatory tariffs, according to market sources. By Antonio Gozain and Cas Biekmann Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

European products markets open higher on US tariffs


03/02/25
03/02/25

European products markets open higher on US tariffs

London, 3 February (Argus) — European light and middle distillate markets opened higher today after US tariffs against China, Mexico and Canada were announced over the weekend, but market participants reacted cautiously to the move. US president Donald Trump on 1 February slapped tariffs of 10pc on Canadian energy imports, which account for a significant share of foreign crude and products supply into the US. The tariff rate against Canada stood in contrast to the 25pc tariff applied to Mexico, which may be designed to mitigate the inflationary effect of costlier Canadian crude and products imports in the US market. Eurobob non-oxy gasoline barges were trading at a volume-weighted average of $728/t at 13:40 GMT, up from $715/t since the 31 January close, while underlying Ice February gasoil futures — the futures value against which diesel and jet cargoes are traded — was higher at $727/t, up from $711.25/t. Brent crude values were just 14¢/bl higher, as product cracks firmed by 19.1pc and 8.6pc to $10.37/bl and $20.43/bl against Brent futures for non-oxy barges and Ice gasoil futures, respectively. Any Canadian product sales into the US would see tariffs passed onto the buyer, according to one source with knowledge of the matter, adding they were waiting to see how Canada otherwise responds to the US tariffs. Canadian refiners could also start sending their product to west Africa or Latin America, another source close to the matter told Argus last week. This ‘wait-and-see' approach was echoed by one Mideast Gulf gasoline trader, while two European analysts said the desired policy outcome of rebalancing trade between the US and Canada was not straightforward, and may make Canadian products imports more affordable as the Canadian dollar depreciates. The US may be better prepared for a gasoline supply shock as a result of seasonal stockpiling, one analyst said, but the US Atlantic Coast has a more significant gasoline supply shortage than Canada if gasoline output were to remain in the domestic market north of the border, another said. In a sign of concerns over US Atlantic Coast diesel tightness, the Sebarok Spirit LR2 appeared to have been booked to deliver a mixed cargo of 10ppm diesel and gasoline from the Port of Antwerp to New York by 15 February, according to Kpler tracking data. These type of voyages "never happen", one analyst said, with Europe structurally short of diesel and the ARA hub a reliable diesel buyer of last resort. The vessel was still anchored at the Port of Antwerp today. In the event of lower Canadian crude deliveries to US refineries, US product cracks could strengthen, one analyst said, but added a halt in supplies of Western Canadian Select (WCS) to US refineries was unlikely. A strengthening in product cracks could exacerbate a seasonal improvement in Rbob gasoline premiums ahead of the summer driving season, the source said, while transatlantic diesel arbitrage economics could remain shut firmly for longer — closing off a key supplier from the European diesel market. It was not immediately clear how product flows from Canada to the US were otherwise impacted today, as most product exports into the US are made via pipeline. No new gasoline or diesel cargoes were recorded loading at Canadian ports signalling US delivery by Kpler today. Two vessels carrying clean products from Valero's 265,000 b/d Jean Gaulin refinery, Quebec, were sitting offshore northeast US signalling to discharge volume at New Haven, Connecticut on 5-6 February. By George Maher-Bonnett Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

US delays Mexico tariffs by a month


03/02/25
03/02/25

US delays Mexico tariffs by a month

Mexico City, 3 February (Argus) — The US has agreed to postpone the implementation of 25pc tariffs on Mexican goods for one month, "allowing Mexico time to demonstrate good results for the US people and our people" on key security concerns, President Claudia Sheinbaum said today. Under the agreement Mexico will immediately reinforce its border with the US with 10,000 national guard troops to prevent drug trafficking into the US, with a specific focus on fentanyl, Sheinbaum posted on social media platform X following a conversation with President Donald Trump. The US pledged to take stronger action to curb the flow of high-powered firearms into Mexico, she said. US president Donald Trump confirmed the tariff delay in a social media post, saying there would be negotiations in the coming weeks with Mexican officials and US secretary of state Marco Rubio, secretary of the treasury Scott Bessent and secretary of commerce Howard Lutnick. The tariffs were originally set to take effect on 4 February. By Antonio Gozain Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

India’s base oil imports fall in November 2024


03/02/25
03/02/25

India’s base oil imports fall in November 2024

Singapore, 3 February (Argus) — India's base oil imports fell to 202,580t in November 2024, down by 5.4pc from a year earlier, data from GTT show. Imports in November decreased for the second consecutive month from September 2024. But import volumes in January-November 2024 were 19pc higher compared with a year earlier. Production at domestic refineries increased in November as plants were restarted after maintenance. The demand for finished lubricants was weaker than expected after the Diwali festival, which took place on 31 October 2024. This could be because of a slowdown in India's economic growth. India's GDP is estimated to grow by 6.4pc in the April 2024-March 2025 financial year, down from 8.2pc a year earlier, government data show. Base oil imports from South Korea fell by 28pc on the year in November but rose by 35pc on a year-to-date basis. Imports from the UAE increased significantly on the year in November. The UAE mainly produces premium-grade base oils. By Chng Li Li India base oils imports (t) Nov-24 m-o-m ± % y-o-y ± % Jan-Nov 24 y-o-y ± % South Korea 91,872 18.0 -28.2 1,067,245 35.0 UAE 27,830 43.3 61.5 248,980 24.1 Saudi Arabia 21,675 -24.0 9.5 225,649 -11.4 Singapore 18,138 -51.9 -6.2 357,943 21.5 Taiwan 13,005 -41.9 NA 101,656 18.2 Total 202,580 -5.5 -5.4 2,511,889 18.5 *Total includes all countries, not just those listed Source: GTT Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

South Korea’s base oil exports slip in December


03/02/25
03/02/25

South Korea’s base oil exports slip in December

Singapore, 3 February (Argus) — South Korea's base oil exports dropped in December, while total volumes over 2024 held steady compared to 2023, GTT data show. Exports dropped in December on the back of a seasonal slowdown in demand and lower refinery runs . India remained the top buyer in December and took 27pc of total South Korean cargoes, followed by China and southeast Asia which each absorbed 17pc of total exports. Volumes to China rose on the month, likely boosted by restocking efforts to secure cargoes for delivery before the lunar new year holiday on 28 January. But total shipments to China fell by 30pc on the year in 2024, reflecting growing domestic production capacity of premium grade base oils that curbed China's appetite for imported supplies. US purchases dropped by almost 50pc on the month in December, while full-year volumes were down by 10pc compared to 2023. The US typically imports Group III base oils from South Korea, but import interest fell as some US Group II refiners prioritised Group III production given higher margins. Relatively higher Group III prices in the US also attracted more Group III offers from the Mideast Gulf. Lower exports to the US and China were partially offset as sales to Europe climbed by 74pc on the year in 2024. Volumes to Europe fell by 40pc on the month in December, but remained above the five-year monthly average of 18,800t. Europe continues to offer the highest delivered prices for Group III base oils globally. By Tara Tang South Korea's base oil exports t Dec m-o-m ± % y-o-y ± % Jan-Dec'24 y-o-y ± % India 78,837.3 -10.4 -0.6 1,047,155.1 20.6 China 50,003.2 46.2 -39.2 499,785.6 -29.8 US 36,151.8 -47.5 -56.5 593,242.2 -10.4 Singapore 16,020.2 -31.7 -15.2 250,742.6 7.3 Total 290,104.6 -24.2 -24.0 4,170,952.7 -0.5 Source: GTT Total includes all countries, not just those listed Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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