The typical summer doldrums may be setting in earlier than usual this year, or the current market situation may be an extension of the quiet spring season that participants have found so difficult to explain. However, while base oils and lubricants demand remained muted in many segments, there has been an uptick in industrial and automotive applications, while naphthenic base oils demand was also quite healthy.
One bright spot on the horizon appeared to be an expected pickup in summer travel. Despite earlier conflicting reports about a potential recession in the United States in the second half of the year and expectations that economic uncertainties would place a damper on family outings, trips, and other activities, reports this week pointed to an upbeat summer travel scenario. According to CNN.com, “the leisure and hospitality sectors of the economy are thriving three years after the pandemic gutted restaurants, hotels, bars and airlines. […] The sector is just 2.4% shy of their February 2020 levels. And it’s not even summer yet.” Market players hoped that an increased number of travelers would translate into higher demand for fuels and lubricants from the automotive, aviation, marine and rail segments.