Americas/EMEA base oils demand outlook: Week of 11 August

·         US base oils demand likely to stay muted.

·         Expectations of growing surplus supplies boost attraction of maintaining lower stocks and procuring smaller top-up volumes more frequently.

·         Buyers could seek to maintain sufficient volumes to cover any supply-disruptions as market heads into time of year when Atlantic hurricane activity typically peaks.

·         Hurricane activity remains muted so far, although tropical storm forms in eastern Atlantic.

·         Rangebound crude oil prices curb concern about any upward-pressure on base oils prices.

·         Sustained pressure on US base oils export prices instead raise prospect of growing pressure on domestic prices as gap between domestic and export prices widen.

·         US base oils export flows add to signs of weaker domestic demand.

·         US base oils/lube exports to Mexico and India rise in June 2025 even as total US exports fall.

·         Rise in shipments to key export-outlets for spot volumes points to weak demand from term buyers in domestic and overseas markets.

·         Weak domestic demand in month of June suggests buyers were wary about volume of additional supplies to procure as cover for any supply-disruptions during Q3 2025.

·         Fall in US Group III base oils prices adds to signs of weak domestic demand.

·         Group III prices fall despite heavy round of Group III plant-maintenance in Middle East and Asia in Q2 2025.

·         Lower prices suggest supply is more than sufficient to meet demand even as plant-maintenance cut export volumes.

·         Overseas demand for US supplies could hold firm as export prices stay competitive relative to prices in other markets.

·         Buying interest in markets like India could extend beyond Group II base oils to products like Group I brightstock.

·         Latin America’s base oils demand shows mixed signals.

·         US base oils exports to South America slump in June 2025 to lowest level this year and second-lowest in more than three years.

·         Fall in shipments points to slack demand from term buyers in the region.

·         Weaker demand coincides with falling lube consumption in key markets like Brazil.

·         Slump in US exports to South America in June 2025 could still leave that market with tight supply even with slowdown in demand.

·         Tight supply could trigger revival in demand for replenishment shipments.

·         Europe’s base oils demand could get support from stock-replenishment ahead of typical seasonal pick-up in consumption at end-Q3.

·         Expectations of sufficient supply of most base oils grades, and of rangebound or lower prices, incentivize buyers to limit any stock-build.

·         Regional lube demand stays mixed, adding to incentive to maintain lower stocks.

·         France’s lube demand falls in June 2025 for second time in three months on sustained slowdown in automobile lubricants consumption.

·         Drop in demand in markets like France and Poland in June 2025 contrasts with firmer consumption in Italy, pointing to muted, if any, regional growth.

·         Europe’s Group II base oils prices maintain steeper premium to Group I prices, especially for heavy grades.

·         High Group II price-premium points to firm demand even as improving availability of Group I base oils gives buyers the option to procure more of those supplies instead.

·         Any extension of trend could point to more long-term switch to using Group II heavy grades.

·         Any subsequent fall in demand for Group I heavy neutrals could trigger pick-up in surplus volumes for overseas markets.

·         Overseas demand for Europe’s base oils supply could ease further following expected ramp-up of new production-capacity in Singapore in coming weeks.

·         Singapore’s base oils imports from Europe rise strongly in recent weeks following slowdown in Q2 2025.

·         Any slowdown in such shipments from Europe could put pressure on the supplies to target other outlets instead.