Lubricating oil consumption in Europe’s four largest economies fell in December to their lowest in more than two years, outweighing signs of lower base oils feedstock supply..Italy’s December base oils output falls.Demand fell as a regionwide economic slowdown compounded a seasonal drop in lube consumption.Blenders cut their base oils feedstock requirements accordingly.The slowdown in economic activity in Europe was likely to extend well into this year. That prospect incentivized blenders to delay the replenishment of feedstock supplies ahead of the spring oil-change season.Concern about weak demand and expectations that feedstock supplies will remain readily available instead boosted the attraction of procuring smaller base oils volumes more regularly.Weak demand and deferred stock-replenishment plans left a persistent supply overhang of base oils during the first two months of the year.Regional base oils prices fell in response to the weak fundamentals. Falling prices added to blenders’ reluctance to buy.Any moves to maintain lower inventories over the coming months would cut blenders’ exposure to the risk of even weaker demand.It would also increase their exposure to the risk of tighter-than-expected supply at a time when plant maintenance typically takes place.Lube consumption in December came to little more than 130,000t in Germany, France, Italy and Spain combined.The volume fell from more than 170,000t in November to the lowest since first-half 2020..Demand had slumped at that time in 2020 because of regionwide lockdowns to slow the spread of the Covid-19 virus.A sharp drop in demand at year-end was typical for the time of year. Consumption had fallen by around 20pc in December 2020 and 2021 from the previous month. The 24pc drop in lube demand in December 2022 was larger than that.Demand then typically rebounds strongly in January from the previous month. That scenario already materialized in Italy this year.The fall in demand in Germany in December was much steeper than in the other markets and coincided with an economic contraction in the fourth quarter. Germany's economy is forecast to remain weak at least during the first quarter of this year..Germany’s December lube demand falls.European demand for industrial lubricants continued to fall more steeply than for automobile lubricants in December. The trend reflected the ongoing pressure on manufacturing activity.The four countries' total lube demand of 2.049mn t in 2022 fell by 4pc from 2.14mn t in 2021.The volume also fell from 2.053mn t in 2020, when the Covid-19 lockdowns slashed economic growth..Italy’s January lube demand rises
