ExxonMobil and Shell each recently notified U.S. customers of modest cuts in finished lubricant prices, perhaps launching a round of markdowns that the customer chain has clamored for.
In February, ExxonMobil informed customers of price decrease of up to 3 percent on branded and unbranded lubricants and greases effective Feb. 26.
Photo: George Gill
Finished lubricants have lagged behind the long slide in base stock prices, but two large marketers marked down lubes recently.
On Jan. 25, Shell implemented a price cut of up to 2 percent on finished lubricants.
Last November, Chevron lowered prices for its lubricants, gear oils and greases by up to 2.7 percent.
While none of these price change letters cited specific reasons for the decreases, U.S. prices for base oil – the key raw material used in manufacturing finished lubricants – began rapidly decreasing in August 2014, and the trend has continued through this year.
For example, since then the posted price for ExxonMobils Group I 150 has fallen 50 percent, from $3.81 per gallon to $1.90/gal. Over that time, Motivas Group II 220 has fallen 53 percent, from $3.85/gal to $1.80/gal. The slide in base oil prices was caused by a steep decline in crude oil costs. Prices for future deliveries of West Texas Intermediate crude have fallen 69 percent since June 20, 2014, from $107.95 per barrel to $33.89 per barrel yesterday.
Finished lubricant prices have not come close to keeping up. From late 2014 through early 2015, ExxonMobil, Chevron, Phillips 66, Shell, Citgo, Valvoline and Castrol notified U.S. customers of finished lubricant price cuts effective from about mid-January through mid-February last year, ranging from 3.5 to 5 percent.