Surplus narrowed to six-month low as output fell and demand held firmDemand rose across Asia, Europe and the Americas, where US consumption saw an unusual surgeTighter fundamentals helped to cushion impact of seasonal slowdown in demand at year-end .The global base oils market tightened further in October, with the surplus of supply over demand falling to a six-month low as steady consumption magnified the impact of lower output.Global base oils supply exceeded demand by around 300,000 tonnes in October, down from more than 420,000 tonnes in September and the lowest level since April, government data showed..The surplus of less than 730,000 tonnes in September and October combined was down more than 35% year on year from more than 1.12 million tonnes during the same two-month period in 2024.The smaller surplus gave refiners more flexibility to capitalize on weaker crude oil prices and stronger base oils margins during the final weeks of the year..Key Highlights· Global base oils supply fell to a five-month low in October, even as demand rose year-on-year for a fourth straight month..Global Base Oils Supply Falls To Five-Month Low in October.· Demand edged up in Asia for a fourth month and in Europe for a third month, adding to signs that a sustained contraction in the European market has bottomed out.· Demand in the Americas surged for a fourth month, driven largely by an unusual jump in US consumption..US’ October Base Oils Supply Falls to Six-Month Low.Market RepercussionsAny sustained increase in global demand would help absorb a recovery in supply and mitigate the impact of a seasonal year-end slowdown in consumption.Even with a likely recovery in output in November and December, the smaller overhang curbed pressure on refiners to clear excess cargoes or make significant price adjustments to facilitate exports.The rebound in base oils prices relative to crude and gasoil from early November reflected this tighter dynamic.