Houston-TX: The market participants of Base Oil in the U.S. are keen to strengthen the wait-and-see position against the ongoing challenging fundamentals of the domestic market. The unprecedented plunge in the Crude Oil values lifted significant pressure from the Base Oil offers during the second week of July, followed by close monitoring of the Crude Oil offers and competing fuel prices. In recent terms, the focus on most feedstocks on the refining levels amidst the high demand from the domestic and overseas markets. This week, the discussions for Base Oil have stabilized amidst the reduced cost support.

The West Texas Intermediate prices dropped to around 90s USD per barrel amidst concerns regarding the possible recession and new implementations of lockdown in China after the new cases were detected last week. In response, the market participants worried about the upcoming term's demand outlook from the overseas market.  

In the second quarter of 2022, the global market observed a severe shift in the market trends amidst the retaliatory sanctions on Russia by the U.S. and the E.U. with the support of several other nations. The inflation has gripped the global market tremendously as the supplies of the energy commodities from one of the major exporters were absent worldwide. This setback has shifted the trading patterns among the countries and regions and levied a response of high-interest rates at the micro-economical level leading to a sudden plunge in the consumption from the downstream sectors besides prompting the healthy chance of a recession in the European and American markets.

Although, due to the peak consumption season, the demand for Base Oil and Lubricants remained healthy in the U.S domestic market. At the same time, the shutdown in China prompts the Asian suppliers, especially from South Korea, to divert their cargoes toward the North American market to maintain a netback.