Base oil markets around Europe, the Middle East and Africa appeared to stabilize the past few days, but a sentiment of underlying weakness persists. Group I prices showed signs of leveling off, but Group II sellers are aggressively protecting or seeking to expand their market shares while the Group III segment shows signs of tightening for the moment but looks like a buyers market long term.
Recent run-ups in crude and feedstock costs have only created further problems for base oil producers, who have talked for some time of trimming output. Some are now considering heavy discounts to move stocks out of tank. The media has seized on renewed fighting in Libya as critical to future crude prices, but in reality the countrys current output is too small to make it a significant factor.