A few customers were trying to build up inventories after using up existing stocks, while others were making inquiries on the spot market to compare prices and start placing orders.

Participants had mentioned ample supplies of API Group II base oils over the last few weeks, but producers have been able to place several cargoes into India, the United Arab Emirates, and Europe, which should help bring the segment more into balance.

It was not clear whether the increased buying interest in India was solely due to fast-paced activity in the lubricants sector, or because of an unexpected shutdown at a suppliers base oil plant.

There was talk that a Middle East producer, which ships product to India on a regular basis, had unexpectedly shut down its refinery for a two-month maintenance program, but this could not be confirmed with the producer directly. A market source said a turnaround had been scheduled for an upstream unit at the refinery, and that this should not have affected base oil production, but further details were unavailable.

Some Group II barrels were also sold to Europe, with a number of parcels expected to be making their way to Turkey.

A U.S. Group I cargo was also heard to have been concluded into Nigeria for February shipment. U.S. Group I producers continue to ship product to Mexico, but issues with the railway system were still causing some delays, according to sources.

Given all these product movements, participants said the export price decline seen over the last several weeks had stalled.

It was also heard that the Group III segment was well-supplied in the U.S. as a result of a South Korean producer shipping several cargoes at the end of the year. Product from the Middle East was also heard to be making its way into the U.S. supply system, and prices have stabilized given the recent climb in feedstock costs.

Prices for imported Group III base oils were still said to be competitive compared to cuts produced within North America because of feedstock cost advantages, although Asian suppliers have less of an edge than their Middle East counterparts, sources explained.

On the naphthenic front, San Joaquin Refinings base oil plant in Bakersfield, Calif., was expected to resume production on Feb. 17, following a two-week planned turnaround that started on Feb. 2. The plant has capacity to produce 8,100 barrels per day of naphthenic base oils, according to LubesnGreases Guide to Global Base Oil Refining.

Upstream, crude oil futures rose by about two percent on Tuesday, boosted by OPEC-led production cuts. Saudi Arabia said it would reduce oil production to nearly 9.8 million barrels per day in March, well below the production quota it had previously agreed to maintain. The continuing closure of parts of the Keystone pipeline that brings Canadian oil into the United States helped support U.S. crude prices.

On Feb. 12, WTI February futures settled at $53.10 per barrel on the CME/Nymex, down 56 cents/bbl from $53.66/bbl on Feb. 5.

Brent futures for April delivery closed at $62.42/bbl on the CME on Feb. 12, and had settled at $61.98/bbl on Feb. 5.

Light Louisiana Sweet crude wholesale spot prices settled at $59.68/bbl on Feb. 11, compared to $61.50/bbl on Feb. 4, according to the Energy Information Administration.

Low sulfur vacuum gas oil was at March WTI plus $15/bbl ($67.41/bbl) and high sulfur was also at crude plus $15/bbl ($67.41/bbl) on Feb. 11. By comparison, low sulfur VGO was hovering at $65.81/bbl and high sulfur VGO at $64.56/bbl on Feb. 4, according to data published by PetroChemWire.

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