Last week, the Base Oil market experienced a volatile trend within different countries. The US, the exporter of Base Oil, witnessed a marginal hike owing to the high crude oil values, while the European countries maintained overall stability amidst an ongoing holiday season that muted the trading activities.

Under the influence of prevailing market sentiments, the Base Oil market in the US has marginally elevated by 0.7% amidst the price adjustment to settle at USD 1680/MT Base Oil Group II N600 and USD 1350/MT Base Oil Group II N100 during the first week of August. As per the market players, ExxonMobil announced price increases this week, which surprised some distributors. The company will be raising its prices, effective from August 4th, due to rising feedstock crude oil prices. However, it was observed that the recent jump in crude oil and vacuum gas values was more than the rise in Base Oil prices, leading producers to raise prices to maintain margins within the USA. Despite this, it was noted that Base Oil demand has not been as strong as expected during the spring and summer, and they are concerned that further price increases could hurt sales. However, the plant turnaround, which restarted in August, will only affect the unit that produces the light viscosity grades. Furthermore, Calumet was expected to complete a routine turnaround at its Group I and Group II plant in Shreveport, Louisiana, having a capacity of 11800 bbl/day.

Followed by the previous market sentiments, the Base Oil market in Europe remained unchanged to settle at USD 1215/MT Base Oil II Light SN and USD 1045/MT Base Oil I Light SN FD Hamburg (Germany) during the first week of August 2023 amid the ongoing holiday season in Europe muted the trading activity for the Base Oil and other downstream lubricant products. As per the recent assessment, the demand-supply fundamentals have been stable, and the gap between supplies and consumption has not changed much during this timeframe—moreover, the demand outlook for Base Oil likely to remain bearish during August. Many blending operations have halted or moved to reduced hours, leading to a significant decrease in productivity. The quantity of finished lubricants coming off production lines has reached an all-time low.

As per ChemAnalyst, the US Base Oil market is expected to decline amid the shipping of Asian cargoes to Mexico at competitive prices, likely declining the price trend during August.