Most suppliers have been dealing with high inventories given that supply has outpaced demand for the past three or four months, but the first signs that order levels had started to improve emerged in early March.

Buying interest for export barrels intensified with several transactions finalized, including a number of cargoes to India and the United Arab Emirates, likely as a result of a shutdown at a refinery in Yanbu al Bahr, Saudi Arabia.

There will probably be a reduction of API Group II barrels moving from the United States to Europe in coming months due to the late February start-up ofExxonMobils Rotterdam plant in the Netherlands, but exporters have been gradually securing alternative takers of their base oils.

Demand from Mexico also remained steady in February and March, with all the export deals helping combat oversupply in the U.S. market.

At the same time, buyers acknowledged that having a number of offers to choose from was beneficial, and reiterated that they had not seen a shortage of product.

On the naphthenic front, there were no major changes reported, and sources described the market as well-balanced. Producers were keeping a watchful eye on crude oil prices, as climbing values have started to exert upward pressure on base oil indications.

Come April, both paraffinic and naphthenic suppliers hoped that activity would flourish, resulting in robust demand and tighter supply conditions.

Producers expressed opinions-or at least wishes-that domestic base oil prices had bottomed out in early March, and hoped that steeper crude oil and raw material costs, together with the spring hustle and bustle, would offer support to base oil price indications in the coming weeks.