There were contrasting views about base oils demand in the United States, with some suppliers seeing steady uptake in July, and others noticing a gradual decline in requirements. Base oil and lubricant consumption typically softens in the second half of the year following a strong summer driving season, which is generally believed to end on Labor Day in early September. The lackluster buying interest may have also stemmed from buyers securing smaller volumes on hopes that they may be able to acquire additional product if prices succumb to downward pressure in the coming weeks.
Some market participants see holding thin inventories as a potential problem in the U.S. if there are weather-related disruptions during the busiest period of the hurricane season in late August and September. From all accounts, both buyers and suppliers were keeping lower inventories than in years past, perhaps expecting a mild hurricane season.