There has been an uptick in base oil market activity in Asia as participants returned to the market following holidays and several weeks of subdued trading. Producers were either keeping steady offer levels or have increased them slightly on improved demand and higher crude oil and feedstock values which were placing upward pressure on base oils. However, some of this pressure was offset by plentiful availability of most grades and buyers’ confidence that they would be able to procure material from various sources.
Regional refiners will also be assessing the allotment of feedstocks in their refining operations, as diesel and vacuum gasoil supplies were expected to tighten globally after the implementation of European Union sanctions on Russian refined products on Feb. 5. A drive to increase distillates production in detriment of base oil output might lead to tightening supplies of the latter.