US base oils and lube production recovered in March to a four-month high, boosting supply at a time of firm domestic and overseas demand.

Output of 5.13mn bl (723,000t) in March rose by 11pc from 4.62mn bl the previous month, according to the EIA. The volume was the highest since November.

Output had fallen sharply during the first two months of the year, mostly because of a slump in production in the Louisiana Gulf coast region to its lowest since early 2020. A drop in production like that typically coincides with plant maintenance work.

The recovery in US output in March similarly coincided with a rebound in production in the Louisiana Gulf coast region.

Output of paraffinic base oils in the region climbed to a seven-month high and well above typical levels of around 1.54mn bl/month over the past year.

The recovery in US base oils production was timely.

It coincided with tighter supply in Europe and a subsequent rise in demand for volumes from other sources.

Lube demand in South America has also steadied after slowing late last year and early this year.

But the prospect of US base oils production sustaining or rising from these levels was less clear.

US refiners have raised their run rates in recent weeks to their highest levels since 2019. The move reflected more a response to tight availability of middle distillates.

Unusually strong diesel prices relative to crude and tighter feedstock availability added to refiners’ incentive to focus on middle distillates production.