All Is Quiet on the Base Oils Front
Compared to the first six months of the year—when posted price increases pelted paraffinic base oil buyers almost every month—July and August offered a reprieve. No price adjustments took place, and September was a fairly muted month in terms of pricing.
The only exception was a round of decreases that took place in the naphthenic sector, lowering pale oil prices by 30 cents per gallon and 45 cents per gallon, depending on the producer, between August 5 and August 15. The downward price revisions were prompted by a substantial drop in crude oil and feedstock prices and slowing base oil demand.
Crude oil futures tumbled in late July on concerns about a potential global recession and other downbeat economic factors. This was paired with reduced oil demand in China due to pandemic-related lockdowns. Gasoline and diesel prices were more moderate as well, lifting some of the pressure to boost base oil margins and uphold high output levels.