Base oil prices were stable to firm in Asia, supported by a tightening supply and demand ratio amid renewed buying appetite from a few segments of the market. Crude oil and feedstock prices remained volatile, unnerving both buyers and sellers as it made forecasting difficult during a time of the year when many negotiations for next year’s supply contracts take place. Surging COVID cases in China, a devastating earthquake in Indonesia and the Soccer World Cup also captured participants’ attention this week.
Crude oil values have been on a downward spiral over the last two weeks, although they ticked up briefly on Tuesday. Futures slid again in early trading on Thursday given a build in U.S. gasoline stocks and news that the Group of Seven (G7) nations considered a price cap on Russian oil above the current market level. Given that production costs were estimated at around $20 per barrel, the proposed cap of $65-$70/bbl would still make it profitable for Russia to sell its oil and in this way prevent a global supply shortage, Reuters reported.
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