Category: News

Globally, green shoots are appearing in some base oil markets as demand starts to rebuild after some eight months of COVID-19. The original areas affected appear to be coming out of the dark, albeit slowly – areas such as China South Korea and other Asian nations.

However other regions such as Australasia, Europe, the United States and South America are still battling high numbers of new cases that hamper a return to some semblance of normality.

The “new normal” is here to stay according to reliable sources, suggesting that it may be some years before the base oil scene in Europe, the Middle East and Africa returns to anything resembling pre-pandemic times. As part of the energy industry, base oils have been badly affected by the fall in demand for industrial and consumer goods, since manufacturing in all instances is heavily reliant on lubricants and the various types base stocks used to make them. read more

EMEA Weekly Base Oil Report

Base oil markets are still struggling to recover from the economic downturn caused by the COVID-19 pandemic, but prices have started to recover, particularly in the API Group I camp.

Group I production cutbacks accomplished over the past few months b have started to bite, and rising demand is exerting pressure on the supply chain. The other factor affecting demand for Group I base oils is the large price differential between Group I and Group II prices, which is acting as a deterrent against buyers moving over to Group I. This difference in pricing is narrowing as Group I levels start to rise, but there remains a massive incentive to continue using Group I grades wherever possible. read more

Base oil markets in Europe, the Middle East and Africa are reeling from continuing effects of the coronavirus pandemic. Export prices for API Group I base stocks are coming under the most severe pressure due to complete lack of substantial demand from export destinations, coupled with competing supply, mostly from the United States.

The overall effect is that prices are under pressure since sellers are almost desperate to move base oils due to rising inventories and limited storage. Output has slowed but production rates are still outstripping demand by a factor of around five to one, piling pressure on selling numbers. read more

After the chaos of last week’s collapse of crude oil prices, markets have been adjusting upwards – at least until early Monday when values started to slide again.

This phenomenal weakness of the market has been caused by two basic elements, the first being the fall-off in demand due to the coronavirus pandemic, and the secondly being the continued build-up in crude stocks and inventories – for which few storage facilities remain. The collision of those circumstances drove West Texas Intermediate prices into negative territory for the first time ever April 20, when they sank to an astonishing minus $40.32 per barrel. read more

EMEA Base Oil Price Report

The hot news this week, apart from the continuing saga of coronavirus, is that West Texas Intermediate crude prices have collapsed. The U.S. benchmark crude is trading at its lowest level this century, while base oil demand continues to be virtually non-existent.

West Texas Intermediate crude is also in a state of “super-contango” because the gap between the price paid for oil today and contracts for delivery in future months is at its highest level in more than a decade. This should encourage traders to store oil and hold out for higher prices, but today’s barrels are being sold at distressed prices as they struggle to find buyers amid fears that there might not be available storage capacity to house supplies. read more

EMEA Base Oil Price Report

Economies remain paralyzed by the spread of Covid-19 with many employees and their bosses working from home wherever possible. This does not make for a happy scene for the base oi markets where many players are reeling from the potential threats to business, the full effects of which are yet to be felt.

The coronavirus pandemic is widespread, and while some parts of the world may be over the worst of the problem, others are just beginning to realize the implications. Europe, the Middle East and Africa are affected, with countries like Italy and Spain badly hit by the pandemic. The United Kingdom and Germany seem to be managing the situation perhaps better than others, but the effects are global, with everyone being subject to restrictions on movement of people and materials. read more

As Covid-19 spreads across the globe, businesses and trade have been subjected to a number of restrictions and travel bans. Lockdowns in Spain and Italy are taking their toll, with most businesses closing down for the foreseeable future, endangering economies further.

Markets will take some considerable time to recover, with the effects now anticipated to drag on for months, if not years. In fact so far the full effects of coronavirus are yet to filter through many countries with some only starting to encounter the fallout from the pathogen. read more

EMEA Base Oil Price Report

As if the coronavirus epidemic were not enough, an international dispute between two of the world’s biggest oil producers, Saudi Arabia and Russia, has triggered a price war and sent the price of crude spinning to its fastest fall since 1991.

Brent crude oil is down almost 50 percent this year and equity markets have tumbled across the globe. Monday saw one of its worst days since the Great Recession in 2008. Ironically the turmoil has come out of failed efforts to shore up the price by OPEC, which counts for around 30 percent of global production, and OPEC+. read more

EMEA Base Oil Price Report

As the Covid-19 coronavirus spreads, base oil markets are anxiously awaiting some form of respite. Markets are slowing in many areas with demand for finished lubricants expected to fall further over the coming months.

Crude prices have retreated to new lows following alarm bells ringing for major economies like China and Japan. Dated deliveries of Brent crude had almost crashed through the $50 mark, but responded on Monday to post at $51.70 per barrel for May front month. West Texas Intermediate crude has also fallen and is now at $46.75/bbl, still for April front month. read more

EMEA Base Oil Price Report

With attendee numbers down from last year, the ICIS World Base Oils & Lubricants Conference was obviously feeling the effects of the Covid-19 coronavirus that started out in China. Many players from the Far East, India and even Europe were missing. With new cases being identified in Italy and the United Kingdom this week, the term pandemic is starting to be used.

Industrial and commercial operations in China have been particularly affected so far, but the implications for a global downturn are real and are starting the drip-feed through routine and ordinary business. The impacts on the base oil industry have so far been relatively localized to Far Eastern markets, but many discussions at the conference last week centered around supply and pricing for the short, medium and even longer terms. read more