US base oils and lube consumption fell in July to a record low, just a month after demand had risen close to its highest in more than three years.
The sharp fluctuations in consumption likely contrasted with steadier end-user lubricants demand.
The volatility instead partly reflected moves by lube blenders to adjust the timing of their procurement plans to cut their exposure to rising base oils and lubricants prices.
Base oils and lube consumption of 2.19mn bl (308,590t) in July fell by 46pc from 4.07mn bl the previous month to the lowest since EIA records began in 1981.
The lower consumption cut total US base oils and lube demand to 23.74mn bl in the first seven months of the year.
The 5pc rise in consumption from year-earlier levels slowed from a 12pc growth rate in the first half of the year.
The gyrations in base oils and lube demand extended a pattern that began in March.
Consumption rose close to a three-year high that month before falling back sharply in April and May and then rebounding again June.
The unusually early pick-up in demand in March coincided with a surge in base oils prices and subsequent rise in lubricants prices.
A series of price-increases continued over the following months before base oil prices paused in June.
The rise in prices incentivized lubricant blenders and end-users to bring forward their procurement plans to secure supplies at prevailing prices before they rose.
A repercussion of these moves was to complicate suppliers' ability to meet and respond to this unusual volatility in demand.
Another repercussion was this subsequent slump in demand in July after buyers covered their requirements early.
The slowdown in July also coincided with unusually high motor fuel prices. The higher costs incentivized motorists to limit their driving.
US gasoline consumption typically rises in the month of July from June as the holiday season begins. Gasoline demand fell in July this year from the previous month for the first time since 1995.
US vehicle miles travelled in July fell from year-earlier levels for a second month, reflecting the slowdown in driving activity.
