The conundrum facing base oil refiners may have been partly solved by the sudden slide in crude and feedstock prices, which alleviated the need to raise base oil prices in order to attain acceptable margins.
With ample supply of all types of base oils and demand being relatively low, pressure for markups was becoming critical, particularly for the API Group I segment, where margins had been squeezed to move surplus quantities.
Group I prices have now steadied after producers cut back on output and large quantities reportedly were earmarked for export destinations this week. Both buyers and sellers appear to be in a happier place.
