· US base oils demand likely to stay muted in face of slowing economic growth/manufacturing activity, combined with sufficient availability of supply.· Sliding crude oil prices add to reluctance to buy.· Supply shows signs of staying sufficient to meet demand even with heavy round of plant maintenance work that follows slump in domestic output in Feb 2025.· Signs of sufficient supply even with lower output points to demand weakness extending into Q2 2025.· Sufficient supply and rangebound prices add to attraction for buyers to maintain lower stocks and to procure smaller volumes more frequently.· Prospect of improvement in supply in coming weeks increases further the incentive for buyers to limit their procurement volumes.· Prospect of improvement in supply in coming weeks would provide blenders and distributors with opportunity to secure additional volumes in preparation for Atlantic hurricane season..· Overseas demand for US supplies could ebb amid signs of weaker consumption in key outlets like Latin America.· Weaker consumption curbs impact of any recent drop in surplus availability of supplies from US.· Weaker consumption curbs pressure on buyers to accept prices for overseas supplies that they deem to be too high.· Brazil’s ANP lube consumption data often prone to revision.· Brazil’s current ANP lube consumption data shows dip in demand in Q1 2025..· Pace of slowdown in demand at or close to that level would have several repercussions.· Blenders would seek to maintain lower stocks because of concern about extended slowdown.· Blenders’ existing base oils and lubricants inventories would last longer, pushing back timetable to replenish stocks.· More muted demand adds to attraction of procuring volumes from domestic supplier rather than from overseas.· More muted demand cushions impact of drop in lube production following fire at blending plant in Feb 2025..· Europe’s base oils demand likely to stay more muted as uncertainty about outlook boosts attraction for blenders to keep low stocks.· Low stocks curb blenders’ exposure to possibility of steeper fall in lube consumption.· Healthy availability of base oils supply gives blenders the option of replenishing stocks with relative ease if lube consumption holds firmer than expected.· Risk of paying higher price for some base oils grades could be deemed to be more manageable than risk of high stocks and slower-than-expected demand.· Uncertainty about outlook follows signs of improvement in Europe’s lube consumption at end-Q1 2025 following sustained contraction.· Italy’s lube demand rises in March 2025 for first time in eight months..· Europe’s lube demand trends are typically similar to Italy’s.· Uncertainty about outlook likely to dampen or reverse those signs of improving end-user demand..· Demand for Group III base oils could continue to get support from competitive prices relative to Group II base oils..· Diverse supply sources, in Europe, Middle East and Asia, could add to attraction of Group III base oils.· Diverse supply sources for Group III base oils cushion impact of disruptions to supplies from any one source.· Dynamic contrasts with smaller number of key sources for Group II base oils, and larger market impact of any change in supplies caused by factors like tariffs or maintenance work on key plants..Asia base oils demand outlook: Week of 5 May.Global base oils margins outlook: Week of 5 May.Global base oils arb outlook: Week of 5 May.Italy’s March lube demand rises
· US base oils demand likely to stay muted in face of slowing economic growth/manufacturing activity, combined with sufficient availability of supply.· Sliding crude oil prices add to reluctance to buy.· Supply shows signs of staying sufficient to meet demand even with heavy round of plant maintenance work that follows slump in domestic output in Feb 2025.· Signs of sufficient supply even with lower output points to demand weakness extending into Q2 2025.· Sufficient supply and rangebound prices add to attraction for buyers to maintain lower stocks and to procure smaller volumes more frequently.· Prospect of improvement in supply in coming weeks increases further the incentive for buyers to limit their procurement volumes.· Prospect of improvement in supply in coming weeks would provide blenders and distributors with opportunity to secure additional volumes in preparation for Atlantic hurricane season..· Overseas demand for US supplies could ebb amid signs of weaker consumption in key outlets like Latin America.· Weaker consumption curbs impact of any recent drop in surplus availability of supplies from US.· Weaker consumption curbs pressure on buyers to accept prices for overseas supplies that they deem to be too high.· Brazil’s ANP lube consumption data often prone to revision.· Brazil’s current ANP lube consumption data shows dip in demand in Q1 2025..· Pace of slowdown in demand at or close to that level would have several repercussions.· Blenders would seek to maintain lower stocks because of concern about extended slowdown.· Blenders’ existing base oils and lubricants inventories would last longer, pushing back timetable to replenish stocks.· More muted demand adds to attraction of procuring volumes from domestic supplier rather than from overseas.· More muted demand cushions impact of drop in lube production following fire at blending plant in Feb 2025..· Europe’s base oils demand likely to stay more muted as uncertainty about outlook boosts attraction for blenders to keep low stocks.· Low stocks curb blenders’ exposure to possibility of steeper fall in lube consumption.· Healthy availability of base oils supply gives blenders the option of replenishing stocks with relative ease if lube consumption holds firmer than expected.· Risk of paying higher price for some base oils grades could be deemed to be more manageable than risk of high stocks and slower-than-expected demand.· Uncertainty about outlook follows signs of improvement in Europe’s lube consumption at end-Q1 2025 following sustained contraction.· Italy’s lube demand rises in March 2025 for first time in eight months..· Europe’s lube demand trends are typically similar to Italy’s.· Uncertainty about outlook likely to dampen or reverse those signs of improving end-user demand..· Demand for Group III base oils could continue to get support from competitive prices relative to Group II base oils..· Diverse supply sources, in Europe, Middle East and Asia, could add to attraction of Group III base oils.· Diverse supply sources for Group III base oils cushion impact of disruptions to supplies from any one source.· Dynamic contrasts with smaller number of key sources for Group II base oils, and larger market impact of any change in supplies caused by factors like tariffs or maintenance work on key plants..Asia base oils demand outlook: Week of 5 May.Global base oils margins outlook: Week of 5 May.Global base oils arb outlook: Week of 5 May.Italy’s March lube demand rises
