A seasonal slowdown in demand coupled with steady production rates at most facilities have resulted in oversupply conditions in the United States, but recent efforts by suppliers to reduce the product overhang seemed to be paying off. A number of producers have started to trim production rates, while others have exported a few cargoes or lowered their spot price expectations to encourage additional purchases within the domestic sector.
While paraffinic base oil prices remained exposed to downward pressure due to the supply and demand imbalance, there have not been any posted price adjustments as crude oil and feedstock prices offered support to the current price structure. Furthermore, with the rise in values of competing refined products and an expected diesel supply crunch, base oil managers needed to keep healthy margins to validate base stock output.
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