· US base oils demand likely to stay cautious in face of healthy availability of supply and lower crude/diesel prices.· Weaker fundamentals and lower feedstock prices increase exposure to risk of drop in outright prices.· Recent drop in Group I/Group II domestic prices could ease some of the downward price-pressure.· Recent drop in domestic prices reverses recent rise in premium of domestic prices over export prices, especially for light grades..· Feasible arbitrage to multiple overseas markets could curb speed and size of any rise in surplus supplies in domestic market.· Signs that supply-surplus remains manageable could support steadier domestic demand.· Buyers could seek to maintain sufficient stocks as buffer against unexpected supply-disruptions at time of year when activity during Atlantic hurricane season typically rises.· Fire at major blending plant in US Gulf coast market highlights risk of unexpected supply-disruptions and importance of maintaining sufficient sources of supply.· Fire could trigger rise in demand for replacement lube supplies from alternative sources. .· Latin America’s base oils demand could get support from blenders’ tight inventories heading into Q3 2025.· Latin America’s lube demand falls in June 2025 for third time in four months from year-earlier levels..· Demand still exceeds base oils supply in June 2025 for second month and for sixth time in eight months..· Weaker lube consumption and signs of blenders’ preference to maintain lean stocks could curb extent of any pick-up in demand for replenishment base oils supplies.· Expectations of sufficient availability of supplies from overseas markets, and concern about lower prices for those supplies, add to attraction of maintaining lean stocks..· Brazil’s lube demand edges up in July 2025 after falling in each of the previous four months..· Steadier lube demand consumes existing feedstock supplies faster, adds to country’s requirements for sustained flow of large import volumes to cover requirements.· Those immediate requirements could be larger than usual to make up for sharp dip in US exports to Brazil at end-Q2 2025..· Mexico’s industrial lube demand falls in June 2025 for fourteenth straight month.· Mexico’s automobile lube demand rises in June 2025 for third time in four months..· More mixed lube-demand growth trends could boost requirements for certain base oils grades and cut demand for others..· Europe’s Group I base oils demand could see more muted seasonal recovery in coming weeks if blenders adjusted formulations to use more premium-grade base oils.· Tighter Group I supply earlier this year could have incentivized such moves.· Europe’s Group II base oils premium to Group I base oils stays wider than usual in recent months..· Wider Group II premium could reflect such moves to use more premium-grade supplies in place of Group I..· Europe’s Group I base oils exports to markets outside the region rebound to five-month high in June 2025..· Exports rebound even during round of Group I plant-maintenance in Europe in Q2 2025.· Rise in Group I exports contrasts with fall in Europe’s total base oils exports to markets outside the region in June 2025..· Dynamic could reflect firmer regional demand for premium-grade base oils and weaker demand for Group I base oils, leaving more supplies for export..· Demand in Middle East could ease after recent surge in shipments from Asia suppliers like South Korea leaves stocks at more elevated levels.· South Korea’s base oils exports to Middle East rise to sixteen-month high in July 2025..· Rise in exports in July 2025 points to firm demand for spot shipments in Middle East.· Rise in exports coincides with tighter availability of Group I heavy neutrals and increasingly competitive Group II prices in Middle East market..· Increasingly-ready availability of Group II supplies and uncertainty about Group I supplies adds to attraction of procuring more premium-grade base oils.· Even so, Asia’s shipments to Middle East surge at time of year when demand faces seasonal slowdown.· Slower demand likely to curb pace of consumption of existing supplies.· Healthy inventories in Middle East could curb subsequent demand for additional volumes from other regions..Asia base oils demand outlook: Week of 25 August.Latin America’s June lube demand falls.Brazil’s July lube demand holds steadier.Global base oils exports to Middle East rise in July .Base Oil News stories and analysis also available on ICIS platform
