Most of the downward adjustments had been prompted by the unremitting drop in crude oil prices, coupled with abundant availability of base stocks.

While Brent futures are still volatile – rising one day, falling the next – they seem to be seesawing within a much narrower range near U.S. $60 per barrel, and market analysts believe they will stay close to that mark in the next few months.

This condition, together with revitalized demand for base oils, has encouraged some suppliers to increase spot offer levels, particularly of the heavy-viscosity API Group II cuts.

Group II 500/600 neutral prices have been inching up in the Singapore ex-tank market, and sources said they do not anticipate new downward pressure during the month of March.

But there is a contrasting current in the low-viscosity segment of the market, because values are still exposed to downward pressure, given ample supply and sluggish demand.

The heavier grades are seeing better buying interest and less availability, especially in markets such as China.

Part of the reason for the market tightening is the current shutdown of Formosa Petrochemicals Group II base oil plant in Mailiao, Taiwan. The unit, which has a capacity of 600,000 metric tons per year, was taken off-line in early March for a month-long turnaround.

Formosa was heard to have prepared inventories ahead of the turnaround, but it was likely to trim the amount of spot product shipped to China during the month. The producer supplies the domestic Taiwanese lubricants market, and also exports significant volumes to China and other Asian destinations.

Also in China, some buyers have seen a reduction in Group I availability because producers have been running plants at reduced rates due to lackluster base oil demand and better margins for fuel products. A number of refineries have also reduced their daily crude throughput because of weaker prices.

While demand for Group I cuts has not shown a giant jump, requirements have improved following the Lunar New Year holidays in late February, and domestic prices of Group I oils have edged up.

A number of Group I units have been undergoing maintenance as well, taking advantage of a slow period in the first quarter of the year. One of these units is Fushun Petrochemicals Group I plant in Liaoning province. Fushun Petrochemical, a PetroChina subsidiary, idled its Group I plant for maintenance in January. The unit, which has capacity of 260,000 t/y, is expected to be restarted at the end of March. The restart has been delayed from an original date in February.

Dalian Petrochemical, which is also a PetroChina subsidiary, was understood to be running its 450,000 t/y Group I base oils unit in Liaoning at 50 percent capacity and is slated for a turnaround in April.

Meanwhile, in India, participants were expecting the arrival of several cargoes of U.S. origin, which had been concluded in February.

The large volumes sold to the export market from the U.S. have tightened spot availability of certain grades, prompting U.S. producers to seek domestic posted price increases.

Chevron initiated a 20 cent-per-gallon increase for its Group II oils on March 11, and ExxonMobil was heard to be moving up its Group I bright stock by 10 cents/gal and its Group II cuts by 20 cents/gal as of March 13. Paulsboro Refining will also be increasing its bright stock by 10 cents/gal on March 18.

Prices in Asia were assessed as largely stable-to-firm this week, with a couple of ranges moving up marginally, mainly due to increased offer levels.

On an ex-tank Singapore basis, Group I solvent neutral 150 prices were holding at $660-$680/t, and SN500 was assessed at $650-$690/t, showing a $10/t increase. Bright stock was heard at $1,010-$1,030/t, also revealing a $10/t upward revision.

On an FOB Asia basis, Group I SN150 was steady at $540-$570/t FOB, while SN500 was up by $10 at $560-$580/t FOB. Bright stock prices were hovering at $980-$1,000/t FOB.

Group II prices were heard at $560-$590/t FOB Asia for 150 neutral, and were adjusted up by $10/t for 500N at $630-$650/t FOB Asia.

Group III prices were steady, with the 4 centiStoke and 6 cSt oils heard at $960-$980/t FOB Asia. The 8 cSt grade was assessed unchanged at $780-$800/t FOB Asia.

An impressive number of inquiries for shipping space seemed to reveal a pick-up in trading activity throughout Asia and the Middle East, with most cargoes expected to be shipped ex-South Korea.

A 2,900-metric ton lot was expected to be shipped from Onsan to Dongguan, China, and Kaohsiung, Taiwan, in 2H March. A 1,950-ton parcel of four base oil grades was being discussed for Onsan to Dongguan, China, for lifting on March 11 onwards. A 7,200-metric ton cargo was on the table for Onsan to Tianjin (4,500 t) and Yingkou (2,700 t), China, for March 19-21 shipment. A 6,000-7,000-ton parcel was heard for Onsan to Sharjah, United Arab Emirates, and Mesaieed, Qatar, for April 10-15 lifting.

A 1,000-ton cargo was being discussed for Ulsan to Kandla, India, for March 20-30 shipment. A 5,200-ton lot was expected to move from Ulsan or Yeosu to Sharjah, United Arab Emirates, on March 20-30. A 1,000-ton parcel was likely to be shipped from Ulsan or Yeosu to Hamriyah, United Arab Emirates, for March 20-30 shipment. A 6,500-ton lot was on the table for Ulsan to Singapore and Merak, Indonesia, for April 1-10 lifting.

A 1,700-ton lot of two grades was quoted for Yeosu to Tanjung Priok, Indonesia, for March dates. A 1,500-ton parcel of two grades was likely to move from Yeosu to Merak, Indonesia, in early April. A 1,800-ton cargo of two grades was being worked on for Yeosu to Tianjin, China, for April 1-5 lifting.

A 3,000-ton cargo was expected to be shipped from Daesan to Nantong, China, in 2H March. A second 3,000-ton lot was quoted for Daesan to Quanzhou and Dongguan, China, for March dates.

Lastly, a base oil lot was being discussed for Mizushima, Japan, to Singapore in 2H March.

Upstream, April ICE Brent Singapore futures were trading at U.S. $53.99 per barrel in afternoon trading on March 16, compared to $59.34 per barrel on March 9.