· US base oils demand likely to stay lower as seasonally-slower consumption adds to caution about outlook.· Expectations of healthy availability of supply give buyers flexibility to maintain lower stocks and top up with smaller volumes more frequently.· Lower crude oil prices could add to downward pressure on prices that already face pressure from weaker fundamentals and lower export prices.· Lower prices add to attraction for buyers to hold back.· Discount of US Group II N100 export price to domestic price deepens in H1 Aug 2025 to widest level in more than a year.· Widening discount because of lower export prices raises prospect of adjustment in domestic prices.· Domestic N100 price duly edges lower, trimming the discount slightly..· Demand could get some support from moves to maintain sufficient stocks to cover against any supply-disruptions, especially as hurricane-season moves into its more active period.· Overseas demand for US supplies could get support from competitive US prices and signs of more ready availability compared with suppliers in other markets.· US Group II light-grade prices flip in H1 Aug 2025 to widest discount to CFR India prices in more than a year..· US Group II shipments to India this year consisted mostly of mid-viscosity and heavy-grade base oils.· Recent weakness of US light-grade prices could trigger pick-up in arbitrage shipments of those supplies too..· Latin America’s demand could be more muted.· Expectations of rising US supply and lower prices boost buyers’ incentive to hold back.· Signs of weak lube consumption and healthy supplies give buyers additional room to hold back.· Brazil’s base oils imports stay higher than usual in July 2025 for fourth straight month, boosted by arrival of more US shipments..· High imports likely keep blenders’ stocks at healthy levels, curbing any urgency to replenish inventories..· Europe’s base oils demand likely to be mixed.· Demand could get boost from moves to build sufficient stocks in preparation for seasonal pick-up in lube consumption in month of September.· Demand could get more support in southern Europe, where lube consumption shows signs of more widespread growth.· Lube consumption in Spain rises in June 2025 for first time in three months, adding to higher demand in Italy and Portugal..· Even in southern Europe, volatility of lube demand growth likely to incentivize blenders to continue to limit inventories.· Expectations of ready availability of supplies give blenders flexibility to top up with additional volumes if demand exceeds expectations..· Europe’s Group I base oils prices hold firm relative to prices in other markets.· Firm prices point to relatively firm supply-demand fundamentals, especially for heavier grades.· Cargo of brightstock from US reaches India in July 2025, tapping increasingly feasible arbitrage to that market.· US cargo moves to India rather than to Europe, even with Europe brightstock price at more competitive level than CFR India price..· Shipment of brightstock cargo to India rather than to Europe could suggest that regional supply in Europe is sufficient to cover demand.· Shipment to India rather than Europe could reflect concern about seasonal slowdown in demand in Europe during summer-holiday period. .· UK’s June base oils exports to Europe fall to four-month low in June 2025, while shipments to markets like Africa rise..· Shipments to Europe fall even during round of plant-maintenance work in the region.· Drop in shipments to Europe from key supplier of Group I base oils could suggest regional supply was sufficient to meet demand even before start of Q3 2025..· Europe’s Group II heavy-grade prices extend rise vs Group I SN 500..· Widening Group II price-premium and improving availability of Group I SN 500 incentivize blenders to procure more Group I heavy-neutrals.· Ongoing Group II price-strength suggests demand remains firm despite improving availability and more competitive price for Group I base oils.· Dynamic could reflect a more structural switch to using more Group II base oils.· Demand in Middle East for Group II heavy grades could get boost from increasingly competitive Group II prices relative to Group I base oils..· Tighter regional availability of Group I base oils, and more plentiful availability of Group II base oils in US and Asia, could add to attraction of using more of the premium-grade supplies..Asia base oils demand outlook: Week of 18 August.Global base oils margins outlook: Week of 18 August.Global base oils arb outlook: Week of 18 August.Base Oil News stories and analysis also available on ICIS platform
