Americas/EMEA base oils demand outlook: Week of 27 October

·         US base oils demand likely to stay muted amid expectations of waning end-user consumption and improving supply in coming weeks.

·         US base oils demand typically falls in month of November from October.

·         Prospect of slowdown in demand would coincide with rise in supply following expected completion of plant-maintenance in H1 Nov 2025.

·         Domestic base oils prices stay unusually steady relative to feedstock prices and export prices for most of the year.

·         Steady price-differentials point to relatively balanced supply-demand fundamentals and could incentivize buyers to maintain rather than hold off procurement plans.

·         Any concern that supply-demand fundamentals could change could conversely prompt moves to hold back.

·         Overseas demand for US supplies could be more mixed.

·         US Group II base oils prices maintain wide discount to prices in markets like Europe and India, especially for heavy grades.

·         Prospect of seasonal slowdown in demand in Europe and rising supply in Asia could still deter buyers from seeking arbitrage shipments.

·         Europe’s base oils demand likely to stay cautious amid weak end-user demand and ready availability of supply.

·         Weak lube consumption growth and seasonal slowdown in demand at year-end add to incentive for blenders to maintain low stocks.

·         France’s lube demand falls in Aug 2025 for fourth time in five months amid persistently weak consumption of industrial oils.

·         Weak lube consumption adds to contraction in Europe’s lube demand in Aug 2025.

·         Europe’s base oils prices point to increasingly weak demand for Group I supplies relative to other grades.

·         Europe domestic Group I price-discount to Group II prices holds at widest level in more than two years, reflecting that dynamic.

·         Demand in Middle East could be slower in coming weeks as wave of shipments from Asia adds to blenders’ stocks.

·         Asia’s base oils exports to Middle East rise in Sept 2025 to highest since early-2023.

·         Most of those shipments are likely to reach Middle East during Q4 2025.

·         Any subsequent slowdown in requirements would remove key outlet for surplus volumes from markets like Europe and US at a time of year when they often have surplus shipments to clear.

·         Any slowdown in requirements, and any extension of Asia’s high exports into Q4 2025, could force more of Asia’s supplies to target other outlets instead.

·         Any such moves to target other outlets could face additional competition from supplies from US or Europe.

·         Prospect of rise in supply and weak demand adds to incentive for buyers in Middle East to hold back and consume existing stocks first.

·         Prospect of rise in supply and weak demand likely to cushion impact of planned plant-maintenance work in Saudi Arabia in Nov-Dec 2025.