Lube demand in Europe’s four largest economies weakened in October amid an increasingly steep fall in consumption of industrial oils.The region’s lube demand typically holds firm or rises in October from the previous month after a lull in activity during the summer.Lube consumption instead contracted in October from September at its fastest pace in more than four years.Lube demand of less than 178,000t in October from Germany, France, Italy, and Spain combined edged up by 1pc from year-earlier levels, government and industry data showed..But consumption fell by 6pc from 188,500t the previous month.Consumption of 1.83mn t in the first ten months of the year fell by 4pc from an already-low 1.90mn t during the same period a year earlier.The fall in lube demand in October mirrored a slowdown in economic activity in the region.Industrial production in the Eurozone fell in October from the previous month after rising in August and September.Economic activity extended its slowdown during the final months of the year.The drop in lube consumption in October cut blenders’ requirements for replenishment supplies of base oils feedstock.The speed of the slowdown in lube consumption also exacerbated their concern about the outlook and boosted their preference to minimize stocks.The trend cut regional demand for base oils at the same time as supply improved. Prices fell sharply in response.But the fall in lube demand was not uniform for all products.Consumption of passenger car engine oils (PCMO) remained firmer throughout the region. Demand for industry-related lubricants fell.The divergence mirrored signs of firmer activity in Europe’s services sector compared with the industrial sector.The region’s services purchasing managers’ index for December pointed to contraction for a fifth month. But the index rose to the firmest level in four months.Firm PCMO demand boosted blenders’ need to replenish more quickly their stocks of base oils used to produce those engine oils.The trend supported firmer fundamentals for Group III base oils especially..France’s October lube demand falls
