Base Oil prices in Europe have long been primarily driven by the abundance of the commodity supply. Since December and January are typically considered slow months in buying activity, many manufacturers are lowering prices to reduce stockpiles and in anticipation of resuming demand. As a result, supply for the local market remained consistent, making them sufficient to meet all domestic and global demands. Additionally, distributors were unwilling to fill or take vessels with Russian characters, which resulted in the product's adequate availability in the region. In terms of demand, the European market's demand for Base Oil has been a source of concern for Base Oil in the global market but has been highly unsure to Europe due to the region's significant risk of a worsening recession. Reduced Base Oil demand eventually impacted the product's price trend, and a crude oil supply decline aggravated the market's state.

The U.S. market, however, has seen prices continue to go lower this week as well. Mexican interest in American products, particularly API Group I grades, has recently increased. Given that Group I refineries had decreased production in the months prior in favor of distillates output due to greater profits, these base oils were reportedly tighter in the United States than Group II cuts. The U.S. diesel stockpiles were thought to be extremely low, which would give refiners more incentive even though Base Oil margins are currently higher.

As per ChemAnalyst, the overall outlook for the Base Oil market appears to be balanced, as supplies are sufficient in the regional market to satisfy the demand. However, as a lubricant and finished goods producers begin to store up for the busy spring production cycle and the oil-changing season, suppliers are ready for higher buying appetites in February and March, which should help balance supply and demand. Additionally, some reductions in contract volumes will start to take effect in February.