Spain’s October lube demand falls

Spain’s lubricating oil demand fell in October for the third time in four months as a region-wide slowdown in economic activity curbed lubricants consumption.

Demand edged up from September amid signs that firmer activity in the services sector continued to counter a steeper slowdown in industrial activity, cushioning the drop in lube consumption.

Lube demand of 33,300t in October fell by 1pc from year-earlier levels, according to Spain's CORES, which tracks the country's energy stocks.

Demand rose from 32,880t in September.

Even with the slowdown in recent months, consumption of 347,490t in the first ten months of the year was down less than 1pc from 349,560t during the same period last year.  

Slowing economic growth in Europe in the fourth quarter of the year compounded a seasonal slowdown in lube consumption in markets like Spain and added to the attraction for blenders to hold smaller stocks.

Falling regional base oils prices added to their reluctance to procure supplies of the lubricant feedstock.

The moves curbed their exposure to the possibility of an even steeper slowdown in demand over the coming months.

The moves also left blenders exposed to the possibility of tighter supplies and higher prices if lube demand exceeds expectations over the coming months.

Lube consumption is anyway typically stronger in the first half of the year than the second half.

Spain’s slowing industrial production growth in recent months highlighted the pressure on that segment of the economy.

But the country’s retail sales edged up in October at their fastest pace in five months.

The services purchasing managers’ index for November rose to a four-month high and pointed to expansion after two months of contraction.

A continuation of those trends would likely limit the size of any drop in lubricants consumption.