US base oils and lube demand fell to a multi-year low in December amid a seasonal slowdown in domestic consumption.The size of the drop in demand was smaller than usual and coincided with an unusual fall in supply in December.The smaller fall in consumption and the large drop in supply curbed the size of the supply-build at the end of last year.The smaller supply-build in turn cut pressure on US refiners to make sharp price adjustments late last year or early this year to clear surplus volumes.The same dynamic showed signs of extending through the first two months of this year.Domestic base oils and lube demand of 1.53 million barrels (215,000 tonnes) in December fell from 1.67 million barrels the previous month to a one-year low, government data showed.But consumption was up more than 30% from less than 1.20 million barrels in December 2023.The size of the 144,000-barrel fall in demand from November also shrunk by more than half compared with the same two-month period in 2023.Total demand, or domestic consumption and exports combined, still fell to less than 5.40 million barrels in December for the first time since 2022.But the volume fell only slightly from 5.48 million barrels the previous month and by 2% from year-earlier levels.The more muted slowdown contrasted with a 10% fall in the US' total supply in December from year-earlier levels.The surplus of supply over demand duly fell to less than 500,000 barrels in December.The surplus was smaller than usual, shrinking from more than 1 million barrels in the month of December in 2022 and 2023.The smaller surplus cut pressure on US refiners to trim prices to move the lingering volumes.US base oils export prices held steady in the first two months of this year, reflecting that dynamic..US’ December base oils supply falls .US' Dec base oils exports stay lower.Base Oil News stories and analyses also available on the ICIS platform
