Spain’s November lube demand falls

Spain’s finished lube demand fell for a third month in November amid a regionwide slowdown in economic and industrial activity.

The drop in lube demand came at a time of year when blenders typically seek to trim their base oils feedstock supply before year-end.

Weaker-than-usual consumption compounded those moves.

The trend repeated itself throughout Europe, curbing base oils demand at a time when supply had improved. Prices fell sharply in response.

Concern that lube demand would continue to fall at the start of this year slowed blenders’ moves to replenish base oils stocks.

Even if demand shrinks further, outright lube consumption in the first six months of the year is typically higher than during the second half of the year.

The combination of a seasonal rise in demand and blenders’ reluctance to replenish inventories raised the prospect of a sharper rebound in stock-replenishment moves later in the first quarter of the year.

Spain’s lube demand of 35,080t in November fell by 8pc from year-earlier levels, according to CORES, which tracks the country's energy stocks.

The contraction was the steepest in more than a year and far exceeded the 1pc fall in the country’s total consumption to 382,570t in the first eleven months of the year.

Regional demand for industrial oils especially has faced growing pressure from the slowdown in economic growth.

Spain’s industrial production contracted in November for the first time in eight months.

The country’s manufacturing purchasing managers’ index (PMI) for December pointed to contraction for a sixth month.

Europe’s passenger car engine oil demand fared better in the second half of last year amid firmer activity in the services sector.

Spain's services PMI for December pointed to expansion for a second month, following contraction in September and October.