· US base oils demand could ease amid expectations of ready availability of supply and steady-to-lower prices.· US demand typically rises in month of October from September before slowing in month of November..· Typical rise in demand in month of October would coincide with major plant shutdown for scheduled maintenance work.· Recent drop in US domestic base oils prices suggests that supply continues to outpace demand despite drop in production and any final round of procurement before year-end lull.· Weakness of domestic demand increases market’s reliance on overseas outlets to clear surplus volumes and to maintain relatively balanced fundamentals..· Recent rise in some US Group II base oils export prices could instead curb demand in overseas outlets like Latin America and India..· Narrower US Group II light-grade price-discount to CFR India price increases incentive for buyers to consider lining up supplies from other sources.· Any slowdown in India’s demand for US Group II base oils would force US suppliers to target other markets instead.· Slowdown in demand for US supplies could materialize anyway following expected rise in Asia’s base oils supply in coming months following start-up of new unit in Singapore.· Any slowdown in US exports to India would follow persistently-high shipments to the country in 2025.· High shipment volumes help to clear surplus supplies from US domestic market.· India’s imports from US rise to four-month high in Aug 2025, reflecting that dynamic..· India’s base oils imports from US in July-Aug 2025 include unusually large volume of Group I base oils.· Recent fall in US Group I export prices could prolong buying interest in markets like India.· Group I shipments from US also likely to face less direct competition from rise in Asia’s premium-grade base oils production capacity..· Latin America’s base oils demand for US supplies could be more mixed.· Demand could ease amid expectations of lower rather than higher US prices in coming months, especially following completion of upcoming plant-maintenance work.· Signs of sufficient availability of regional supply give buyers flexibility to hold back in response to any short-term dip in availability of supplies from US.· Demand for light-grade base oils could get boost from narrowing US Group II N100/120 premium to diesel/heating oil prices.· Argentina’s demand for base oils supplies from overseas markets could be more muted.· Argentina’ base oils supply set to get boost from arrival of several shipments from US in Sept 2025, adding to stocks and curbing urgency to line up additional volumes.· Rising stocks contrast with falling demand.· Argentina’s lube demand falls in Aug 2025 for fourth time in five months..· Weak lube demand likely to leave stocks lasting longer.· Weak lube demand incentivizes blenders to procure smaller volumes from domestic sources.· Currency volatility adds to incentive for blenders to cover more of their requirements with supplies from domestic sources..· Europe’s base oils demand could focus on locking in smaller volumes to cover any short-term requirements.· Prospect of seasonal slowdown in demand in late-Q4 2025 incentivizes blenders to maintain low stocks.· Blenders’ lower stocks could cushion impact of season slowdown in demand later in Q4 by curbing need to trim already-low inventories.· Europe’s base oils demand shows signs of holding firmer for premium grades than for Group I base oils.· Dynamic could reflect more balanced Group II/Group III fundamentals, in addition to any rise in outright demand for premium-grade base oils. · Seasonal dip in lube demand during summer months shows signs of impacting Group I base oils more than other grades.· Italy’s lube consumption falls by close to 40% in Aug 2025 from previous month.· Size of seasonal contraction is similar to same period in 2024.· Any repeat of that dynamic throughout rest of Europe would leave larger-than-usual fall in demand during summer months..· Larger fall in demand would need larger-than-usual adjustment in base oils supply to maintain balanced fundamentals.· Europe’s combined base oils imports from US and Middle East already fall to six-month low in July 2025, cutting supplies of premium-grade base oils..· Dynamic shows signs of extending at least through Aug 2025.· Drop in supply would help to cushion impact of seasonal fall in demand during that period.· Europe’s Group II and Group III prices rise relative to Group I prices through Q3 2025..· Rising price-premium to Group I base oils incentivizes blenders to use more Group I supplies.· Sustained price-strength of premium grades points to increasingly sticky demand, combined with more balanced supply..India’s August base oils imports fall.Argentina August base oils supply rises.Italy’s August lube demand rises.Global base oils arb outlook: Week of 29 September.Asia base oils demand outlook: Week of 29 September.Base Oil News stories and analysis also available on ICIS platform
