Crude oil prices have been under assault for some time now. And while lower crude prices may have consumers smiling, a long list of European and Asian refiners are struggling to make profits in an industry plagued by overcapacity. And theres more new capacity to come.
The glut of base oils on the market has been the subject of much speculation of late. And according to JPMorgan, new capacity is expected to significantly outpace growth in demand.
The unfortunate outcome is that the additional capacity may squeeze margins and hurt weaker players. When margins are weak, capacity utilization drops, and the smaller players feel pressure to cut output.
But whats bad for refiners is good for blenders. In particular, African blenders expect to take advantage
of lower base oil prices to stimulate their markets to adopt better quality engine oils.
May will bring a great opportunity for LubesnGreases Europe-Middle East-Africa advertisers. This will be our annual Readex Survey, a no-cost service that helps them gauge the effectiveness of their ads. Readex, an independent market-research firm, will ask readers to compare and rank advertisements as most attention-getting, most informative and most believable. We share the data with advertisers so they can see how well their message connects with readers.
March 13 is the closing date to reserve space in our May issue, so advertisers who want to share in this valuable research should be in touch quickly with Gloria Steinberg Briskin: gloria@LubesnGreases.com.
– Richard Beercheck
Dick@LubesnGreases.com