The Labor Day holiday on Sept. 4 marked the end of the summer driving season and the period when demand for lubricants was likely at its highest. While base oil suppliers prepared for a slowdown in consumption, they also expected a small uptick in requirements from consumers who have depleted inventories and needed to return to the market to replenish stocks, particularly as buying has been diffident for most of the year. Some buyers also tend to postpone purchases until the fourth quarter, when prices tend to come under pressure, depending on supply fundamentals and crude oil and feedstock costs.
Many participants worried about potential supply issues as August and September are the most active months in terms of hurricanes and tropical storms along the United States Gulf Coast, where many base oil facilities are located. Last week, Hurricane Idalia brought a storm surge, strong winds and flooding in Florida, Georgia and the Carolinas, but no production disruptions were reported.