The tight conditions, coupled with healthy buying interest, have driven spot prices up, with fresh quotes heard up to 20 cents per gallon above offers heard two weeks ago, according to sources.

Within the API Group I segment, local and foreign buyers were actively seeking bright stock barrels from U.S. suppliers, but offers were scarce.

A Group I producer reported receiving several requests for bright stock, but the suppliers tight supply position was preventing it from participating in the spot market.

There are next to no spot cargoes or extra rail cars of bright stock available, a buyer confirmed.

Participants said that bright stock barrels quoted at Brownsville, U.S., at around $2.85 to $2.95/gal in March had disappeared, and there was a lack of offers at any level.

Likewise, with a turnaround at the Excel Paralubes Group II plant still ongoing and shutdowns scheduled to start at the Chevron plant in Pascagoula, Miss., and at Ergons Group I/II facility in Newel, W.V., this month, availability of Group II grades was deemed very limited, with some producers said to be holding negligible inventories.

The turnaround at the Excel Paralubes unit in Westlake, La., which started in early March, was expected to last approximately 52 days, while the Chevron plant was likely to be down for 22 days starting in April, according to sources.

A Group II supplier who typically exports large quantities to South America and Asia was heard to be sold out and was therefore unable to take additional orders.

A majority of U.S. suppliers were prioritizing the fulfillment of domestic contract orders and restricting the volumes offered for export.

Domestic customers have increased buying activity the past week, and our inventories are all very low, a producer noted.

The extended shutdown at the Shell-Qatar Petroleum GTL Pearl facility in Ras Laffan, Qatar, has tightened the Group III segment, although it was heard that Adnoc was preparing to ship large quantities of Group III cuts from its facilities in Ruwais, United Arab Emirates, to those consumers in Asia and the U.S. who had the required approvals.

I can say unequivocally that supply of good quality Group II and Group III is limited, and the appetite for these oils is insatiable, a market participant emphasized.

On the naphthenic side of the business, demand was also heard to be quite healthy, with availability heard to have tightened in recent weeks.

In the finished lubricants segment, several manufacturers have issued price increase notifications in line with the rising raw material values (for details, see story in this issue of Lube Report).

Upstream, crude oil futures recovered lost ground and rose to a near one-month high as expectations of a drawdown in U.S. crude and product inventories outweighed news of restored Libyan production.

Prices also moved up on expectations that the Organization of the Petroleum Exporting Countries and other oil producers would extend the output cuts agreed at the end of last year.

West Texas Intermediate futures on the CME/Nymex settled at $51.03 per barrel on April 4, up $2.66/bbl from the March 28 settlement of $48.37/bbl.

Light Louisiana Sweet wholesale spot prices closed at $52.15 per barrel on April 3, compared to $48.87/bbl on March 27, according to data from the U.S. Energy Information Administration.

Brent was trading at $54.17/bbl on the CME on April 4, up $2.84/bbl from $51.33/bbl on March 28.

Activity in the U.S. manufacturing sector continued to expand in the month of March, according to a report released by the Institute for Supply Management on Monday, but slowed somewhat compared to the previous month. The ISM said its Purchasing Managers Index (PMI) dipped to 57.2 in March from 57.7 in February, although a reading above 50 still is an indication of growth in the manufacturing sector.

Historic U.S. posted base oil prices and WTI and Brent crude spot prices are available for purchase in Excel format.