AFPM ’12: Base oils demand strong in Q1 but may slip in 2H

03 April 2012 19:30  [Source: ICIS news]

SAN ANTONIO, Texas (ICIS)--US base oils demand improved to levels not seen in more than five years during the first quarter but concern about demand in the second half of the year is mounting, a seller said on Tuesday.

“US demand during the first quarter really improved from the drag of October-December, and for us was the best we’ve seen in years,” a base oil supplier said on the sidelines of the International Petrochemical Conference (IPC).

Group I base oil prices recently increased on feedstock costs and the flurry of rises that have hit the European market in the past several weeks.

Vacuum gas oil (VGO) premiums have moved to the $30s/bbl range over benchmark crude West Texas Intermediate (WTI).

“We are a little worried that it could get sloppy this summer,” the seller said. “Consumer confidence is very cautious and with gasoline prices moving up, we think confidence will drop in the second half of the year.”

Hosted by the American Fuel & Petrochemical Manufacturers (AFPM), the IPC continues through Tuesday.

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