· US base oils demand likely to stay muted.· Buyers could cover more of any seasonal pick-up in demand at start of Q4 with unused stocks.· Lack of weather-related supply disruptions in recent months likely leaves those stocks at higher-than-expected levels.· Major refiner’s posted-price cut at end-Sept 2025 adds to buyers’ incentive to hold back until there is clarity over other refiners’ response to the price-adjustment.· Impact of cautious demand could be more muted at start of Q4 2025 as domestic plant-maintenance work cuts supply.· Cautious demand later in Q4 2025 could have larger market impact if supply recovers strongly following completion of maintenance work.· Unusually strong domestic demand in July 2025 accounts for more than 50% of US supply that month..· Share of supply is second-highest in twenty-nine months and up from typical share of less than 38% of supply over past year.· Strong domestic demand counters impact of surge in output in July 2025.· Weaker demand at year-end could instead magnify impact of any rise in output..· Dynamic increases importance of overseas demand holding firm over coming months.· Overseas demand could instead soften.· Buyers in overseas markets are likely to face pick-up in availability from other markets like Europe and Asia.· Dynamic would increase importance of US export prices holding at competitive levels to sustain firm demand.· US base oils export prices instead extend recent rise relative to prices in markets like India..· Moves to line up additional US shipments to India could face further difficulty if buyers target supplies from logistically-closer sources to curb exposure to any downward price-pressure.· Recent Group III base oils price-strength relative to Group II prices and to vacuum gasoil follows tighter availability of supplies from Middle East..· Supply from Middle East could get boost from pick-up in arrival of shipments in recent weeks and in coming weeks.· Improving supply would require commensurate pick-up in demand to sustain balanced-to-tight supply-demand fundamentals..· Latin America’s base oils demand could be more muted.· Expectations of rise in overseas supply in coming months and downward pressure on prices incentivize buyers to hold back.· Signs of steady-to-weak lube demand in the region curb further any urgency for buyers to replenish stocks.· Brazil’s lube demand stays steady-to-weak in Aug 2025, reflecting that dynamic..· Europe’s base oils demand likely to stay cautious.· Blenders’ low stocks could sustain more regular procurement of smaller volumes.· Blenders’ low stocks could curb size of seasonal inventory-drawdown at year-end.· Signs of steady-to-weak finished lube demand and healthy availability of base oils supply sustain feasibility and attraction of maintaining low stocks.· Demand for Group I base oils could be weaker than other grades amid concern about exposure to further downward price-pressure.· Overseas demand for Group I base oils could also ease as competing supplies from US and Asia pressure prices in markets like Middle East.· FOB Europe Group I SN 500 price-discount to ex-tank Sharjah price narrows at end-Sept 2025 for first time in two months..· Any extension of that price-trend, and the underlying fundamentals driving it, would further complicate any arbitrage shipments to outlets like the Middle East..· Demand for Group II base oils could be more muted amid high prices relative to other grades and other regions.· Steep Europe Group II price-premium to FOB Asia prices could facilitate extension of recent pick-up in arbitrage flows from that region..· Any subsequent rise in supply would coincide with seasonal slowdown in demand during final weeks of 2025.· Europe’s Group III base oils demand could get support from blenders’ moves to replenish lower stocks.· Prospect of pick-up in supplies originating from Middle East in coming weeks could curb urgency to replenish those stocks..US’ July base oils demand rises.Brazil’s August base oils supply lags demand.Global base oils margins outlook: Week of 6 October.Global base oils arb outlook: Week of 6 October.Asia base oils demand outlook: Week of 6 October.Base Oil News stories and analysis also available on ICIS platform
