US base oils and lube demand rose in March to its highest in almost three years on the back of strong economic growth and concern about higher base oil prices.

Base oils and lube demand of 4.11mn bl in March surged by 31pc from the previous month to the highest since April 2019, according to the EIA.

Consumption of 10.81mn bl in the first three months of the year rose by 13pc from the previous quarter to the highest since second-quarter 2019.

US base oils and lube demand had been holding relatively low over most of the past two years even amid a strong rebound in the country's economic growth.

High base oil prices, a shortage of additives and logistical issues had been several factors that had capped demand during that period.

Last year’s high base oil prices had coincided with relatively lower crude oil and diesel prices.

This year’s higher base oil prices have coincided with and mostly been in response to the surge in crude oil and diesel prices since late last year.

The higher crude prices supported expectations of a rise in lubricant prices, which has subsequently materialized.

Expectations of higher prices often trigger a rise in demand as buyers seek to lock in more supplies before the new prices take effect.

Any pre-emptive buying has also coincided with signs of easing tightness of additives supplies.

The rise in demand in March was higher than the rebound in US base oils and lube output that month. The trend curbs US producers’ surplus volumes available for shipment to overseas markets.