Despite base oil suppliers’ efforts to encourage fresh orders, consumption levels were still lagging those registered in the spring of years past, although some encouraging signs of increased buying appetite have started to emerge. A number of participants blamed the generally lackluster consumption on economic uncertainties and the rising cost of living, which dampened demand for finished products. Others conjectured that blenders had been operating with high inventories since the end of the year and were still trying to draw down existing stocks.
What was particularly perplexing was that base oil demand had been stronger in the spring of the two previous years, despite many pandemic-related restrictions on travel and an increase in remote work at that time. By comparison, more employees are currently commuting to work and there has been an increment in business travel, but demand from the automotive segment remained sluggish, although suppliers said that requirements have started to pick up.