France’s November lube demand falls

France’s lubricating oil demand fell in November for the seventh time in eight months, extending a regionwide slowdown in consumption in the face of slowing economic growth.

The drop in lube demand compounded a seasonal slowdown in consumption at a time of year when blenders typically seek to lower their base oils inventories before year-end.

The fall in lube demand instead slowed blenders’ moves to cut base oils stocks and increased their reluctance to line up replenishment supplies for the start of the new year.

The move repeated itself throughout much of Europe, magnifying the impact of surplus base oils supplies in the region.

Base oils prices fell sharply in response.

The trend extended into early this year, raising the prospect of a delay in the seasonal round of stock-replenishment. The round of buying would then take place in a shorter period of time.

France’s total lubricating oil demand of 41,320t in November fell by 9pc from year-earlier levels, according to Centre Professionel des Lubrifiants (CPL).

The size of the contraction was the steepest in five months.

A 16pc fall in industrial oils consumption led the contraction. Hydraulic oils demand fell by 10pc and metal-working fluids consumption by 43pc.

Signs of an ongoing slowdown in industrial activity are likely to keep pressure on lube consumption.

France’s manufacturing purchasing managers’ index for December held at a level that indicated contraction for a fourth month.

The country’s car sales fell in December for the first time in five months.

France’s lube demand had got some support from steadier passenger car engine oil (PCMO) consumption in August and September.

The support disappeared at the start of the fourth quarter.

PCMO demand fell by 11pc in November after shrinking more than 16pc in October.

PCMO consumption is considered to be more reflective of activity in the services and retail sectors.

France’s retail sales fell in November for a second month and at their fastest pace since late 2020.

The country’s services PMI index for December held at a level indicating contraction for a second month.