US Base Oil Prices Soar Amid Rising Demand, German Market Remains Steady

As per the recent assessment, the US Base Oil market is continuously surging, week by week, under prevailing market sentiments. However, the German Base Oil prices remain unaffected as the traders continued to carry forward a cautious attitude toward the market, while UAE Base Oil values experienced a recent hike amid an unexpected surge in domestic demand during this timeframe.

The US Base Oil market experienced a weekly uptick of 2.9% to settle within 1810 USD/tonne Group I SN 500 FOB Texas during the fourth week of August as the Base Oil suppliers implemented most of the price increases that they announced in recent weeks. This led to an immediate increase in demand, as buyers rushed to place orders before the prices went up. Moreover, enough stock-up was not available at the time of procurement. Therefore, the demand for Base Oil outpaces the supply in the domestic market. The increase in demand was particularly noticeable because demand had been low in the weeks leading up to the price increases. Despite a weak summer season in the US, some Base Oil segments have tightened due to a recent increase in domestic sales, export transactions, and plant turnarounds.

On the other hand, the Base Oil market in Europe, including Germany, experienced overall stability during this week. However, some Base Oil groups have witnessed a marginal hike as the international market demand has gradually risen. Few traders adapted to the changes within the market, while others remained cautious enough, which drove the overall Base Oil market sentiment to support stable protection.

Interestingly, after weeks of declining, the UAE Base Oil prices hiked by 2.6%, an unexpected increase due to the sudden surge in inquiries. The Middle East Base Oil market has shown signs of weakness recently, with prices falling to their lowest levels in months. However, despite the subdued market, several buyers within the domestic market were looking to purchase cargoes of Group I and Group II Base stocks ahead of rising prices. Therefore, the Base Oil market admitted a rebound due to the positive buying enthusiasm during this timeframe. Additionally, a few cargoes are expected to be delivered at the port of U.A.E during the first half of September.

As per ChemAnalyst, in the upcoming weeks, the European market, including Germany, is expected to take an upturn owing to the end of summer break, which might raise the demand for the product along with the further rise in the US Base Oil prices.