Base oil pricing has seen a reprieve in Asia, stabilizing after several weeks of consecutive upward price adjustments as availability has improved, demand has started to cool down, and crude oil and feedstock prices have come off their recent peaks. Economic and socio-political turmoil, not only in the region, but in other areas of the world have had a dampening effect on fundamentals. Weakening demand in Europe against lengthening availability may also affect the Asian market situation and export options moving forward.
Crude oil futures remained volatile, jumping one day and plummeting the next. Prices slipped on Wednesday on United States government data reflecting lower gasoline demand during the peak summer driving season in the world’s largest oil consuming country. Interest rate increases to fight inflation fueled fears of a slowdown in economic activity and lower energy demand. The number of COVID-19 cases in China hovered at a two-month high and government restrictions intensified, feeding concerns of a slump in oil consumption in that country as well.