Base oils price volatility to continue in future - industry players

08 June 2010 07:35  [Source: ICIS news]

SEOUL (ICIS news)--Volatility in the base oils markets will continue in the foreseeable future due to changing demand, supply shortages caused by unforseen events, and globalisation, industry players said on Tuesday.

Besides unstable crude oil prices, other factors have resulted in a volatile base oils market, they said during the 4th ICIS Base Oils Conference in Seoul, South Korea.

Tim Ford, vice president for lubricants at Shell said that supply shortages can occur anytime, the demand for group II/III could change and unforeseen events - such as the shutdown at Indonesia's Pertamina earlier this year - could all impact the base oils market which results in volatility.

Several such simultaneous short-term events could keep the market volatile regardless of crude oil values, he added.

Intercontinental trade in base oils was also growing in part due to the market volatility in base oils, said Peter Kim, marketing manager at SK Lubricants.

Supply demand balances in one region now have an impact on the global market, he added.

In addition, the current tightness in the US base oils market has supported the Asian group II and group III prices to some extent, said other buyers and sellers on the sidelines of the conference. 

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By: Anu Agarwal
+65 6780 4359

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