Global Base Oil Prices Remain Stable or Marginally Decline in Early March 2023

The weather transition period has put the demand for several commodities on hold while radiating an optimistic demand outlook for several commodities, including Base Oil. As per the data, the global Base Oil prices either have declined marginally or maintained stability in the global market during the first half of March 2023.

Asia's Base oil prices remained stable this week, supported by balanced supply and demand, although some of the stronger grades observed stable upward movement on scarcity and high buying and selling activities. The price of Base Oil ll H 150 Qingdao was unchanged in the Chinese market at USD 910/MT during the week ending on 17th March 2023. The price of Base Oil II 500N Ex Jurong (Singapore) also remained unchanged at USD 1030/MT in the meantime.           

In Europe, the prices of Base Oil I Light SN FD Hamburg (Germany) remained the same at USD 895/MT during this week, owing to balanced supply and demand for the product in the German market. However, the price of Base Oil II Light SN FD Hamburg (Germany) declined by 3.3% due to declined demand from the downstream automotive industry in the week ending with 17th March 2023.

In the Middle East, the price of Base Oil II Light SN Ex Dubai (United Arab Emirates) remains unchanged at USD 1445/MT in the UAE market. However, the prices of Base Oil I Light SN CIF Al Hamriyah (United Arab Emirates) declined around 4%, hovering at USD 975/MT. Ample stock availability remained the major driving factor behind this price trend in the country during this timeframe.

In the USA, the price of Base Oil Group II declined around 1% during this week, as in the lubricants sector, demand was lackluster and supported an overall downtrend. While some blenders have reduced lubricant prices to encourage product movement, others have maintained the same prices in the hope that the approaching seasonal demand in the USA will increase consumption. A few manufacturers also noticed that the production costs, including raw materials, labor, and energy, have increased, balancing recent Base oil price reductions. Base Oil prices declined for Group II in the global market, while prices remained stable for Base Oil Group I because of the demand-supply balance.

According to ChemAnalyst, the price of Base Oil in the global market may increase during the second half of March 2023 as the market may observe increased demand from the downstream lubricant sector in the global market. Further, it is anticipated that the seasonal burst of demand will eventually lift the pricing dynamics of the product in the USA, Asia, and Europe. Additionally, under the influence of an optimistic demand outlook, Crude Oil prices might also fluctuate in a narrow range and end with an optimistic undertone.