· US base oils demand could ease as seasonal slowdown in consumption coincides with rise in supply.· Demand could get support from tighter surplus supply at start of Q3 2025 following recent plant-maintenance work in domestic and overseas markets.· Tighter surplus supply curbs prospect of any imminent price-adjustments at time of year when fundamentals typically weaken.· Steady prices typically support steadier demand.· Steady prices and signs of weak outright demand likely to incentivize buyers to maintain lower stocks.· Demand could get additional support from concern about weather-related supply disruptions during Atlantic hurricane season, boosting incentive to maintain sufficient supplies.· US Group III prices stay unusually weak despite tighter supply because of drop in imports.· US Group III 4cSt price-premium to Group II N100 holds above recent lows but remains unusually weak vs historic levels..· Price-weakness suggests supply remains more than sufficient to meet demand despite drop in imports and prospect of slowdown extending into early-Q3 2025.· Lower Group III supply could conversely support firmer demand for Group II supplies..· Demand for US supplies in overseas markets like Europe could get support from wide US price-discount to prices in those markets.· US domestic Group II price discount to Europe prices stays unusually wide for light and heavy grades..· Steep price-discount contrasts with US premium to Europe prices for Group II heavy grades this time a year ago..· Latin America’s base oils demand could be more muted amid expectations of sufficient supply and preference to limit inventory build-up.· US base oils exports to South America hold firm in May 2025 even as volumes slip from previous two months..· Firm US export volumes likely to sustain buyers’ stocks at healthy levels..· Europe’s base oils demand faces seasonal slowdown in coming weeks.· Weak lube consumption and prospect of rising base oils supply add to pressure on demand.· Europe’s domestic Group I base oils prices weaken vs other base oils grades and vs Group I export prices..· Dynamic points to waning demand for Group I base oils in regional market especially.· Weaker price-differential vs Group I export prices boosts attraction of targeting overseas markets instead.· Closed arbitrage to key overseas outlets could complicate shipment of any surplus volumes.· Any signs of extended slowdown in Group I shipments from Middle East could support firmer buying interest from markets like India for supplies from Europe.· Any such drop in supplies would follow signs of slowdown in shipments from Russia.· Turkey and India’s base oils imports from Russia fall in May 2025 from year-earlier levels for fourth time in five months..· Turkey’s Group I imports in May 2025 instead include larger shipments from Egypt for third month, and rare shipment from US. .· Europe’s Group III base oils demand shows mixed signals. · Europe’s Group III base oils price-premium to Group II light grades stays lower than usual even after partial recovery in recent months..· Narrow Group III price-premium increases competitiveness of Group III base oils vs other grades, supporting firmer demand. · Group III price-premium stays narrow despite recent slowdown in flows from Spain and Middle East.· Narrow Group III price-premium, despite tighter supply, could instead point to muted demand..US’ May base oils exports rise.US’ May base oils imports fall.Asia base oils demand outlook: Week of 14 July
