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· Smaller surplus offsets seasonal demand slowdown, easing year-end market pressure
· Output and imports fall year on year, while demand holds steadier
· More balanced fundamentals reduce price volatility, supporting steadier demand
Europe’s base oils supply-demand fundamentals stayed tight in November for a second month, curbing refiners’ urgency to clear surplus volumes in export markets during the final weeks of the year.
Total supply exceeded demand by less than 5,000 tonnes, improving from a shortfall in October, but remaining far lower than summer levels, government and industry data showed.
The tighter balance left the European base oils market better positioned to absorb the seasonal slowdown in demand through late 2025 and early 2026.
Key Highlights
· Total November supply, or output and imports combined, came to less than 510,000 tonnes, up from below 490,000 tonnes in October but down 9% year on year, extending a seven-month contraction.
· Output fell year on year for the sixth time in seven months, while imports slipped for the fourth time in five months.
· Total demand, or regional consumption and exports combined, remained steady for a third month, holding in a 500,000-510,000 tonne/range.
· Demand rose year on year for the second time in three months, driven mainly by higher exports, while regional consumption showed signs of steadying at lower levels.
· The three-month cumulative supply surplus fell to less than 30,000 tonnes, dipping to a nineteen-month low and down from more than 200,000 tonnes during each of the four months through October.
Market Repercussions
The smaller surplus during the final weeks of 2025 cut refiners’ urgency to clear excess volumes and helped offset the impact of softer seasonal demand.
Reduced pressure to clear surplus volumes, or to adjust prices accordingly, extended into the opening weeks of 2026.
In previous years, lingering surplus volumes often triggered price-volatility early in the year, prompting blenders to delay purchases.
Signs of more balanced fundamentals late last year and muted price pressure in early 2026 could conversely speed up blenders’ moves to replenish stocks, supporting steadier demand.
