Base oils supply in the Americas recovered in November amid a pick-up in output in the US and Argentina.

Supply remained lower than usual even with that rise in production and coincided with steady lube demand throughout the region.

Tight supply and firm demand curbed the size of any build-up of surplus supplies in the region during the final months of the year.

The limited supply-build raised the prospect of steady base oils demand early this year and more limited availability of supplies for more distant markets like Africa and India.

Base oils supply of more than 710,000t in November rose from less than 680,000t the previous month, according to production data from major base oil-producing countries in the region.

The November volume was the highest in four months. It still fell from year-earlier levels for an eighth month.

The sustained slowdown in production cut the region’s total supply to around 8.1mn t in the first eleven months of the year.

The volume was down 8pc from more than 8.8mn t during the same period a year earlier.

Supply fell mostly because of a prolonged dip in base oils production in the US.

Lower output in other markets like Brazil and Argentina compounded the fall in supply.

Lower supply and firm demand supported higher base oils prices in the Americas market compared with other regions.

A swathe of arbitrage shipments from those regions moved to the Americas in response.

The availability of those arbitrage supplies could be lower this year as Europe’s ban on Russian base oils imports cuts supply in that market.

A firm recovery in Chinese demand would absorb more supplies in the Asia-Pacific market.

Such a scenario would prompt the need for a rise in base oils production in the Americas region.