Base oil market participants were keeping a vigilant eye on crude oil pricing, as values continued to show wild fluctuations, linked to developments in the Russian war with Ukraine and geopolitical tensions in other parts of the world. On the domestic front, the main points of concern remained the climbing production costs, along with lingering additive shortages and transportation issues.
Suppliers explained that base oil demand was steady, but that it would be stronger were it not for the additive supply issues that were still plaguing downstream operations. Some blenders continued to run their manufacturing plants at reduced rates because they were unable to obtain sufficient additives. This issue seemed to be particularly affecting smaller operations, sources said. Many of the larger manufacturers were able to keep larger inventories of additives and other raw materials and were therefore less affected by shipment delays and the lack of immediate access to certain products. The additive tightness was expected to last for several more months, sources said.
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