When are crude oil prices going to stabilize? Where is the bottom? Are we there yet? These were some of the questions discussed in recent weeks by almost everyone connected to the oil industry.

The answers to these queries were of particular importance to base oil producers, after seeing base stock values drop dramatically alongside crude oil prices during the second half of 2014, and well into January of this year with a round of price decreases on the naphthenics side.

However, the rush to revise base oil prices appeared to have abated – at least for a short interval – in the first few days of February, as crude oil showed signs of strengthening in a number of consecutive trading sessions.

Base oil producers seemed to have been given a reprieve to reassess market conditions and evaluate future movements, with posted prices remaining unchanged for a few weeks.

But upstream fundamentals remained in turmoil, and even if crude prices staged a rebound, base oil market participants knew that downward pressure would persist because of the ample availability of most grades.

Moreover, players said base oil demand was not expected to improve substantially until the end of February or early March, when lubricant blenders typically begin to build inventories for the spring production season.

This would coincide with additional API Group II+ capacity coming to the U.S. market from ExxonMobils expanded plant in Baytown, Texas, which could potentially impact already-precarious price positions.

The United Steelworkers Union strike, which commenced Feb. 1 at several U.S. refineries and was unresolved at this time of writing, was starting to impact crude oil prices and to a limited extent, base oil production as well. One of the affected refinery operators, Lyondell Basell in Houston, has been able to continue loading base oil shipments on barges and tank cars, but truck shipments have been interrupted.

With fundamentals remaining fairly weak, it was difficult to assess whether base oil prices could stabilize at prevailing levels, or whether they would encounter further obstructions on the way to recovery – or to another stumble. What seemed fairly clear was that the market still had a rough road ahead, and that it could take some time before prices attain a stable footing.