Base oil markets throughout Europe, the Middle East and Africa are mostly showing weakening demand across all types of products, although some groups are faring better than others. API Group I is showing the softest demand as inventories grow longer by the week. Buyers are now running the show for these grades, which were tight during the first half of the year.
Despite a rash of refinery maintenance turnarounds, base oil production is returning to nearly pre-pandemic levels as refiners diverting as much feedstock as possible to base oils, in light of their outstanding margins. Of course, as shortages ease, these margins may decrease.