Some corners of the United States base oils market seemed to be tighter than others but finding enough product in the domestic arena did not appear to be a problem, as availability in general has begun to lengthen. This scenario was not unusual in the last quarter, as demand tends to slow down during this time of the year. Consumers try to use up existing inventories, and both producers and buyers start to release some of the extra stocks they had kept during hurricane season. There was again talk about a potential railroad workers’ strike after a major union rejected a tentative agreement with freight carriers, which could affect transportation and deliveries in coming weeks.
The recent base oil posted price decreases communicated by producers in September were also not a complete surprise – historically, most price decreases take place during the fourth quarter, unless there are exceptional circumstances like major supply disruptions. However, the price reversal observed in crude oil and feedstock markets last week on the back of an OPEC+ production cut announcement was expected to mitigate some of the downward pressure generated by the base oils supply and demand imbalance. The steeper crude oil prices also fed concerns about rising inflation and an accompanying slowdown in consumer spending.
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