The Base Oil prices have shown a weaker trend in the US during the second half of April. This was due to a lag in demand from downstream lubricants, as compared to last year in this season, on account of the economic uncertainties. Meanwhile, in the European region, the Base Oil prices have risen marginally due to higher demand enquiries and partial shortage in the region.

The FOB prices in the US of Base Oil Group II N600 have decreased by USD 10/MT in the last week of April, while a similar change was seen in Group II N100 Base Oil. The upstream crude oil has shown a declining price trend, dropping to USD 76.55/barrel on 28th April. The rise in prices in the German market for Base Oil Group I light SN FD and Group II was assessed around 1% during the week ending 28th April.

Furthermore, the demand for Base Oil in the US was forecasted to rise, but buyers in the regional market have shown a prudent approach due to the US inflation and the increase in the living cost in the country. Also, the predictions of hurricanes in the area have caused a fear of production disruptions which is currently affecting the demand for Base Oil.

On the other hand, the European market has shown increased activity in the automotive industry as the offtakes rose, which in turn has spiked the prices of Base Oil. The Chinese market has shown improvement in the automotive sector after the opening of the lockdown, which has increased the import of Base Oil from Germany, thus raising the prices of Base Oil.

As per ChemAnalyst, the future trend for Base Oil in the US market seems to be positive in the second quarter of 2023 due to the increase in demand from the automotive industry in the summer. The European market may have mixed sentiments in the second quarter depending on the market demand.