The US Base Oil prices remained relatively stable during the first week of December 2024 on the back of countervailing factors. While the prices were unchanged, the overall market sentiments were bearish due to a decline in demand from the downstream lubricants sector and a cautious stance from the suppliers due to the seasonal destocking activities. Despite the subdued market activity due to the Thanksgiving holiday in late November, the suppliers were reluctant to decline the Base Oil prices further due to the sudden tightening of supply which offset any mounting pressure and resulted in unchanged prices for Base Oil.

As December 2024 begins, the Base Oil prices in the USA remained unchanged with Group II H600 prices holding steady at USD 1,905 per metric ton. The market sentiments were lulled due to the seasonal destocking activities. Many Base Oil buyers adopted a cautious approach, opting to secure only essential term volumes to sustain daily operations. This cautious behavior was driven by Tax Implications. The desire to maintain lean inventories to avoid potential tax liabilities at the end of the year has influenced purchasing decisions. The downstream lubricants industry experienced a period of low demand, which, coupled with elevated inventory levels, further dampened market activity. Moreover, ample supply and potential export competition could further decline the Base Oil purchasing sentiments. Concerns about fluctuating feedstock Crude oil prices made buyers hesitant to commit to larger volumes due to lower demand from the downstream lubricant industry further eroding the market sentiments.

Earlier in November 2024, several domestic producers had implemented price reductions. However, a recent tightening of Base Oil supply and supplier reluctance to further adjust prices have contributed to the stabilization of the market. A sudden tightening in Base Oil supply at the Excel Paralubes Group II/Group III plant in Lake Charles, Louisiana made some suppliers keep the Base Oil prices steady. The Thanksgiving holiday in late November further reduced market activity, offsetting any potential upward pressure on prices.

As per ChemAnalyst, while the current market conditions point towards stable prices, the outlook for December 2024 remains low due to the seasonal destocking activities. However, a potential tightening of Group II supplies is anticipated in the first quarter of 2025 due to a planned turnaround at Chevron's Group II plant in Pascagoula, Mississippi. Furthermore, export markets may continue to play a significant role in absorbing surplus Base Oil production, particularly for Group II and Group III grades.