US’ October Base Oils Supply Falls to Six-Month Low

US base oils supply fell to a six-month low in October, underscoring tighter market fundamentals at the start of the fourth quarter as strong domestic demand offset weaker exports, keeping stocks low.

Total base oils supply, or output and imports combined, fell to 5.83 million barrels (821,000 tonnes) in October, EIA data showed.

The volume slipped from a four-month low of little more than 6 million barrels in September.

Lower supply contrasted with a continued surge in domestic base oils demand, which climbed to the highest since early 2023.

Stronger consumption cushioned the impact of lower exports, helping to keep inventories tighter than usual.

Key Highlights

·         US base oils output fell to 4.55 million barrels in October, the lowest level since April 2025.

·         Paraffinic base oils output in the Louisiana Gulf Coast district dropped to its lowest since March 2023, reflecting the impact of scheduled plant-maintenance work.

·         US base oils output fell even more sharply in April 2025, when there was a simultaneous slump in production in the Louisiana and Texas Gulf coast districts.

·         Paraffinic base oils output in the Texas Gulf coast district by contrast rose to a ten-month high in October, partially offsetting losses elsewhere.

·         Domestic demand rose by more than 50% year on year in October, extending gains for a fourth straight month to the highest since January 2023.

·         The strength of demand was unusual given ongoing signs of muted end-user lube consumption, as well as a slump in base oils exports over the four months to September.

·         The extension of the surge in demand into October suggested exports remained low that month.

·         EIA data for October exports has yet to be updated.

·         Strong domestic demand helped to counter the impact of weaker exports, limiting stock-builds.

·         The strength of domestic demand, and cautious end-user requirements, pointed to alternative channels absorbing the supply.

Market Repercussions

Lower base oils supply and firmer domestic demand kept US stocks lower than usual at the start of the fourth quarter.

Supply likely rose from November following the completion of plant-maintenance work, while end-user consumption faced a seasonal slowdown.

US base oils margins remained rangebound during the fourth quarter at a time of year when they typically face more downward pressure.

The stability in margins suggested that lower stocks at the start of the fourth quarter helped to keep market fundamentals more manageable through the final weeks of the year.