21 February 2013 16:09 [Source: ICIS news]
LONDON (ICIS)--The European base oil export supply/demand balance, which has supported recent price rises, is now in question, said certain market sources on Thursday.
Export prices in Europe, including the Baltic Sea and the Black Sea, have increased in recent weeks in response to reduced supply and rising demand in key markets.
Faced with poor margins, many producers across Europe are operating at reduced base oil production rates, which has seen overall supply fall.
However, speaking on the sidelines of the annual ICIS World Base Oils & Lubricants Conference in London, certain buyers and traders are now questioning these supporting factors.
“We see that prices are going up but I am looking to understand why because we can still see availability,” said a European based trader.
A Turkish importer questioned the perception of high Turkish demand, stating: “There is no demand.”
For much of the fourth quarter in 2012, export prices declined, but have started to show some strength in recent weeks.
The ICIS base oil conference runs 21-22 February.
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