The Dog Days of Summer May Be a Thing of the Past
Up until a couple of years ago, most base oil market players in the United States started to prepare early in the year for the hectic spring production cycle when lubricant demand picked up and prices spiked ahead of the summer driving season. After this season faded out, everyone was able to relax for a while because the summer doldrums would set in and the market would turn quiet. Posted prices were generally adjusted upward at the beginning of spring, but they usually remained fairly stable throughout the rest of the year. However, most years saw prices come down during the last quarter when suppliers attempted to lower their inventories before December 31.
This year started out with a whirlwind of activity in terms of supply and pricing, and it looks like nobody will be getting much of a break this summer. In the past, there were sometimes three or four base oil price adjustments in a whole year. This year, however, there have been four price increases in the first five months alone.