The outlook for API Group I base oils is softening, with the markets in Europe showing poor demand statistics against a background of fair to good availability. Group II and III grades are holding their own and in some areas nudging prices up.
Markets in Europe, the Middle East and Africa have not shown any verve in their return from summer, instead coasting into autumn in lackluster fashion. Some Group I producers are increasingly concerned over the lack of opportunity to raise prices while crude and feedstock costs rise. With diesel prices climbing, refiners may be tempted to divert feedstock in that direction rather than max out on base oils.