Brazil’s lubricating oil demand fell to a twelve-month low in February, curbing base oils consumption in a region where demand had held relatively firm.

The drop in lube consumption coincided with muted base oils demand in the US as blenders held off replenishing stocks during the first quarter of the year.

Lower consumption in the Americas’ two largest markets complicated US refiners’ options for clearing a persistent surplus of base oils supplies.

It raised the prospect of US refiners targeting more distant markets like Africa and India to clear the surplus.

Several such cargoes of US origin were lined up in March to move to those markets.

Brazil’s lube consumption of just under 81,500mᶟ (72,160t) in February fell from close to 86,600mᶟ the previous month, according to IBP.

The volume rose for a third month from year-earlier levels. It was still the lowest in a year.

Lube consumption slowed in the face of high interest rates and signs of weaker economic activity.

The country’s central bank kept interest rates unchanged in March at a five-year high for a seventh month.

Brazil’s automobile sales fell in February for the first time in eight months to the lowest since the beginning of last year.

Automobile production fell in February for the second time in three months.

An 8pc fall in the country’s industrial oils demand reflected the pressure on manufacturing activity.

Consumption of less than 17,700mᶟ in February fell to the lowest since first-half 2020, when Covid-related restrictions slashed economic activity.

Brazil’s passenger car motor oils (PCMO) consumption remained the outlier and extended its rise for a third month.

Rising PCMO demand mirrored firmer activity in the services sector.

Brazil’s services purchasing managers index’ slipped in February to a level that pointed to contraction for the first time since mid-2021.