A number of suppliers said orders stacked up nicely in the first few weeks of January. It appeared that buyers were restocking their inventories, which apparently had been drained during the past several months. Sellers indicated that much of the volume changing hands was spot material, although contract volumes were also on the rise. The pickup in buying interest could be seen across the board in the paraffinic and naphthenic sectors, and contrasted brightly with Decembers dreary pace.

Some believe that stronger stock markets in early January and news that the U.S. economy appears to be on the mend have injected the market with some much-needed confidence.

Meanwhile, it was not a huge surprise when API Group II supplier Motiva stepped out in early January with a price decrease on its Star products, chopping off 30 cents to 38 cents per gallon.

Base oil consumers anticipated that the Motiva move would open the door for others to decrease their postings, and indeed it did. Their expectations were based on the knowledge that global base oil pricing has spiraled downward in recent months, mainly in Europe and Asia, as demand waned. Traders in those regions tried to lure buyers with lower prices, but to limited success, said sources.

Despite steadily lower U.S. prices, apparently Asian and European prices are still much more competitive. Therefore, opportunities have materialized for imported base oils to arb into the domestic arena at attractive numbers. In fact, it is understood that several cargoes are headed to the United States in the first quarter.

Sources contend that U.S. producers are being forced to drop domestic prices in an effort to compete with the cheaper foreign-based material.

Given this scenario, it will be interesting to see how market activity proceeds into the spring, a time when there is usually a buying frenzy. Sources said they look forward to 2013, saying its a new day, a new time, while bemoaning 2012 as not the best year in business.