17 September 2013 17:32 [Source: ICIS news]
LONDON (ICIS)--European domestic Group I base oil prices have remained stable and some consumers drew hope that lower crude oil values may increase the chance of prices remaining stable into October.
Sources have long expected prices to increase because the high cost of feedstock vacuum gasoil, which is heavily influenced by the price of crude oil, has narrowed producers’ profit margins.
However, despite the crude oil decreases, sources said higher base oil prices were still a possibility.
“I’m hopeful for a period of stability, but you never know,” said a lubricant blender.
A distributor said it felt there is still pressure on producers to increase prices, despite the lower feedstock costs.
It added that while crude prices have decreased, they remain at relatively high levels, and profit margins for producers are probably still considered too narrow.
Late on Tuesday, front-month Brent crude oil was trading at $108.20/bbl, compared with $111.25/bbl a week ago.
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