Italy’s November lube demand falls

Italy’s lubricating oil demand fell in November at its slowest pace in three months amid steady automobile lube consumption and easing pressure on industrial oils demand.

The ongoing contraction in lube demand mirrored other countries in Europe as economic growth slowed.

The slower pace of the contraction added to signs throughout the region of improving confidence about the economic outlook.

Blenders throughout Europe preferred to turn down offers of discounted base oils supplies during the final weeks of the year partly because of concern about the economic outlook.

A stronger-than-expected economy would support firmer lubricants consumption and stronger demand for base oils.

Demand would get a further boost from blenders replenishing lower-than-usual stocks.

Italy’s lube consumption of 33,800t in November fell by 4pc from year-earlier levels, government data showed.

Demand fell for the fifth time in six months amid a slump in industrial oils consumption. The pace of the contraction was the slowest since August when consumption rose.

Industrial oils consumption extended its fall in November for a fourteenth month.

But the pace of the contraction slowed as metalworking fluids demand turned positive and process oils consumption steadied.

Consumption of heavy-duty engine oils (HDEO) fell by 7pc in November, improving from a 23pc contraction the previous month. HDEO is seen as a bellwether for the state of industrial activity.

Italy’s manufacturing purchasing managers’ index (PMI) in November reflected a similar trend. The index pointed to ongoing contraction, but an improvement from the previous month.

Automobile oils consumption rose in November for the sixth time in seven months. The trend mostly reflected the sustained strength of passenger car engine oil (PCMO) consumption.

The product is seen as a proxy for the state of the services and retail sector.

Italy’s services PMI contracted in November for a third month. But it rose to its firmest since August amid an improvement in business confidence.