At long last, a degree of normality returned to base oil markets as workers returned to their desks following winter holidays. Lubricant blending operations have restarted, but base oil demand remains constrained, with many players stating that they will only replenish inventories when necessary.
Availabilities of all groups of base oils are currently good, even though incentive remains for refiners to shift production from base oils to fuels. The diesel premium to base oils has steadied during the recent resurgence in crude values. Crude prices did drop last week, due – many sources concluded – to lack of demand interest immediately following the New Year. Prices are rebounding now, and diesel prices are following, maintaining the motivation for refiners to focus on distillated output.