Europe’s April lube demand slides

Lubricating oil consumption in Europe’s four largest economies fell in April for an eighth month as an expected economic recovery following the relaxation of pandemic-related restrictions petered out.

Total lube demand in Germany, France, Spain and Italy combined fell to 183,010t in April, government and industry data showed. The volume was down 9pc from year-earlier levels.

Lube consumption of 737,860t in the first four months of the year was down 8pc, or more than 66,000t, from 803,940t during the same period last year.

European lube demand has slowed as an economic boost following the removal of Covid-19 restrictions quickly petered out in the face of rising costs, supply disruptions and moves to curb inflation.

The drop in lube consumption coincided with lower-than-expected base oils supply in the region.

Supply dipped because of planned and unexpectedly prolonged plant maintenance work, combined with a slump in shipments from Russia.

Regional base oil prices surged in recent months in response to the tight supply and rising crude oil prices. Demand had also previously expected to be firmer as economic and travel activity revived.

The expected combination of strong supply-demand fundamentals had prompted blenders to prioritise security of supply.

The elements supporting those expectations are now unwinding.

Base oils supply is likely to improve as plant maintenance work draws to a close.

A seasonal slowdown in lube demand is likely to compound the current drop in consumption. Lower demand would improve further the availability of supply.