Base oil prices in the U.S. stabilized in early July after a higher June, supported by tight spot availability and disciplined refiner allocations. June activity featured precautionary inventory building ahead of peak lubricant demand, followed by buying that pushed base oil values higher before a late lull. Demand remained mixed: industrial lubricants and heavy-duty transport stayed robust, with manufacturers purchasing base oil for blending and servicing. However, retail automotive maintenance weakened as inflation and higher fuel costs curtailed discretionary changes. Export flows were uneven, as overseas buyers, notably Brazil, accelerated base oil procurement amid disruptions, while Mexican buyers resisted further increases. ChemAnalyst data indicate export dynamics matter given duties affecting about a fifth of U.S. base oil supply, with inflows from the Persian Gulf and South Korea comprising the majority. Supply factors, including feedstock pressures and maintenance turnarounds, kept base oil offers firm despite easing crude costs. The near-term outlook remains broadly stable to firmer through summer, aided by peak-season demand and disciplined allocations, with risks stemming from logistics and demand resilience across the base oil market.
