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Fall in supply reverses strongy output levels seen in August and September
Europe's supply sees the steepest decline, while supply also fell in the Americas and Asia
Supply could rebound following completion of shutdowns even as seasonal demand weakens at year-end
Global base oils supply fell to a five-month low in October, as a wave of planned and unexpected plant shutdowns cut production across every major market.
The downturn reversed a jump in supply in August and September, easing the risk of a large build-up of surplus cargoes during the final months of the year.
Total global base oils supply fell to around 2.70 million tonnes in October, government data showed.
The volume was down from close to 2.90 million tonnes in September and more than 3.0 million tonnes in August.
August marked the highest monthly supply in more than four years, while September was the second-highest in more than three years.
Key Highlights
· Europe’s base oils supply fell the most, dipping by 18% year on year to a 20-month low, with Group I production most affected.
· The America’s base oils supply fell by 12% to a six-month low, reflecting plant-maintenance in the US and production issues in Brazil.
· Asia’s base oils supply eased to a three-month low, but still rose by 4% year on year and for a third straight month.
Market Repercussions
Global base oils supply fell even as base oils margins remained relatively firm, highlighting that operational disruptions were the primary driver behind October’s weakness.
The extension of firm margins through the rest of 2025 incentivized refiners to accelerate a return to normal operating rates.
Any such moves could trigger a rapid rebound in base oils supply at a time of year when demand faced a seasonal slowdown.
