· US base oils demand could stay cautious at time of year when buying interest typically slows.· Rise in base oils margins stays relatively muted in Q2 2025 even with tighter supply and seasonal pick-up in consumption.· Dynamic points to weaker-than-usual demand and sufficient supply to cover requirements.· US base oils/lube demand falls at start of Q2 2025 from year-earlier levels, reflecting that trend..· Sufficient supply in Q2 2025, even when availability was tighter, raises prospect of more plentiful supply in Q3 2025, when availability is likely to improve and demand ebb.· Such a scenario adds to incentive for buyers to maintain low stocks and to procure supplies on a need-to basis.· Demand could get support from stock-building to cover against risk of weather-related supply disruptions.· Any such pick-up in demand should ease soon following completion of any such stock-building moves..· Latin America’s base oils demand could be more muted, with signs of healthy availability of supply curbing need to line up additional shipments from overseas markets.· Expectations of rise in surplus supply in markets like US in coming weeks add to incentive to hold back.· Brazil’s total base oils demand barely exceeds supply in May 2025..· Demand exceeds supply only because infrequent shipment of large cargo to India balances out weak domestic consumption.· Prospect of slowdown in demand in overseas markets like India would complicate repeat of any such shipments in coming weeks..· Europe’s base oils demand could ease amid expectations of slowing lube consumption and improving availability of supply.· Weaker fundamentals would coincide with reversion of crude oil prices to lower levels, curbing prospect of upward pressure on prices.· Demand for Group II base oils could face pressure from more competitive price and improving availability of Group I base oils in coming weeks.· Europe’s Group II light- and especially heavy-grade price-premium to Group I base oils widens at start of July 2025 and in Q2 2025, boosting incentive to use more Group I base oils..· Steady supply of Group II base oils and concern about more volatile availability of Group I base oils could conversely incentivize blenders to continue to use more Group II base oils in their formulations..· Europe’s Group III 4cSt (low) price-premium to Group II light grades holds in narrow range over past month after rebounding during two months to end-May 2025..· Group III price-premium to Group II holds steady, and still relatively low, despite tighter supply in Europe and heavy round of Group III plant maintenance work in Middle East and Asia in Q2 2025.· More rangebound Group III price-premium could point to firmer demand instead for Group II base oils, cushioning impact of tighter Group III supply..· Completion of most plant-maintenance work in key markets raises prospect of rise in global base oils shipments to key Africa markets like Nigeria.· Those key markets likely relied more on term supplies rather than spot shipments through Q2 2025 as maintenance work cut surplus availability.· Global exports to key Africa markets like Nigeria rise in April 2025 as pick-up in shipments from UK counter dip in flows from US, reflecting that dynamic..Global base oils margins outlook: Week of 7 July.Global base oils arb outlook: Week of 7 July.Asia base oils demand outlook: Week of 7 July.US’ April base oils supply lags demand .Brazil’s May base oils supply matches demand .Netherlands’ April base oils output rises.UK’s April base oils output falls
