Base Oil Prices Reach Record High in November 2023, Putting Pressure on Competitors
- 24-Nov-2023 3:51 PM
- Journalist: Rene Swann
Hamburg, Germany: After witnessing the prolonged stability of the Base Oil market in Germany, prices rebounded and gained momentum during the second half of November 2023. As per the market reports, after Saudi Arabia’s price adjustment, several enterprises in Germany tried to mirror the current global situation to fit into the trading atmosphere, which has successfully been reflected in the Base Oil prices. In addition, for the past few weeks, the European oil market has been facing several challenges affecting the market’s key performance, which eventually led the superior enterprise, ExxonMobil, to paint the picture and raise the quotations they offered for Base Oil.
As per the recent assessment, the ChemAnalyst database has shown that the prices in Germany have demonstrated a hike of 70 USD per tonne on the week ending of November 24th, 2023, compared with the previous week to settle at 1495USD/tonne Base Oil Group II H 500 FD Hamburg. Talking about the current scenario, one major leading business in Europe, ExxonMobil, has raised Group I Base Oil prices to record highs by imposing a blanket on all grades. This move pressurized other Group I Base Oil producers to follow suit. Henceforth, the price rise has also raised the quotations for Group II Base Oil producers. Moreover, the supply of lighter grades of Group I products in the European market is currently limited, and there is not enough surplus to meet export demand as the European Group I market producers have cut production to match regional demand. Additionally, the European Base Oil market is currently witnessing some strange pattern of short supply for API Group I grades, which has created a gap and led the blenders to choose light Group II Base Oil as an alternative. A further consignment of Group I Base Oil originating from Red Sea sources has arrived in Antwerp, and an affiliated Saudi Aramco company from Korea will manage its marketing and distribution within northwestern Europe to cater to the downstream demand.
As per ChemAnalyst, the Base Oil market in Germany is expected to gain momentum in the upcoming weeks as well, following the rise in the offered quotations despite the fact that the demand might slow as the end of the year approaches. Few producers are also reducing their run rates till the destocking of Group I grades, which was compelled by the regional demand. This suggests that producers no longer hold firm to the price increases they announced earlier.