Use the independent price assessments and market coverage in our price reports to track the regional Base oils-Lubes market.
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Updated to Q3 2021
While refinery rates have generally returned to pre-pandemic levels, base oil supply is expected to remain tight. Refiners are struggling to fill their orders, which are backlogged through the quarter, so they will face challenges creating any length. ExxonMobil, which is vulnerable to hurricanes on the Gulf Coast, is not in a position to build inventory. Spot sales are largely suspended by all suppliers.
Demand will continue to be strong, outpacing available supplies at least through the quarter. Refiners expect continued demand pull from Group II buyers. Rebounding economic activity will spur industrial activity, which will support demand for Group I base oils.
While refinery rates have generally returned to pre-pandemic levels, base oils supply is expected to remain tight as refiners attempt to recover from February’s outages. Backlogs will prevent any length from accumulating. US production capacity is largely housed on the Gulf Coast, leaving refiners vulnerable ahead of a projected active hurricane season. Inventories are already at multi-year lows, so refiners cannot build hurricane insurance stocks.
Demand is expected to remain strong, continuing to outpace available supplies at least through Q3. US suppliers generally do not have sufficient supplies to fully meet domestic demand or export demand. Tight additives have tempered demand for base oils somewhat, but additive supply recovery is sure to boost base oils demand further.
Little change is expected in availability. Turnarounds are ending in other regions, but demand is strong and will offset the extra volumes. While the US has resumed more normal refining rates, other regions have yet to do so, which will keep feedstock limited and prevent supply builds. Suppliers are sold out, with no room for hurricane season disruptions.
Demand will remain strong and likely grow when additive shortages improve. Supply will remain insufficient to meet this demand. Finished lubricant inventories are also low, and suppliers are backlogged as well. This will keep demand strong through the quarter.
We offer the following regional Base oils-Lubes analysis and news coverage to keep you informed of factors and developments affecting prices in the Base oils-Lubes marketplace.
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