Supply and demand in Asia seemed to be better balanced than in the previous two months, when tepid requirements had led to a lengthening of supplies and weakening values. A number of refiners have dialed down production rates and there has been an uptick in consumption in a few countries, which helped mitigate the oversupply conditions. However, some base oil cuts have started to succumb to downward pressure on account of waning buying interest.
Both buyers and sellers typically try to lower inventories ahead of year-end to avoid tax repercussions, and this contributed to the lengthening of supply levels as consumers worked down existing inventories and limited fresh orders. At the same time, many buyers had postponed acquiring product for as long as possible and were now returning to the market as stocks have been depleted.
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