We’re digesting this move, one base oil marketer said. Quite frankly we are surprised since our crude feedstock costs have actually risen quite a bit since the last announced move in January.

According to sources, ExxonMobil announced a range of cuts, which it made effective today. It chopped 8 cents per gallon off the postings for its Group I 75 neutral, 100 neutral and 150 bright stock. Group I 250 neutral, 330-370 neutral and 600 neutral fell by 4 cents. Its Group II-plus 130 and 190 came down by 2 cents and 4 cents, respectively.

Motiva also reduced its prices by varying amounts, effective Friday. It lowered its one Group II-plus posting, a 110-viscosity stock, by 7 cents per gallon. Its Group II postings – 70, 105, 145, 305 and 600 – were cut by 5 cents, 8 cents, 4 cents, 4 cents and 6 cents, respectively.

The U.S. base oil market has already undergone three price cuts since mid-October. Sellers and buyers have attributed those cuts to falling crude oil prices, along with the slowing economy.

Several marketers noted, however, that crude prices have gone back up lately, although the price on the New York Stock Exchange fell 62 cents Tuesday to close at $20.88 per barrel. According to the U.S. Energy Information Administration, the average monthly price of West Texas Intermediate was $19.71 in January, up from $19.39 per barrel in December.

Some base oil suppliers speculated, therefore, that this weeks price change may be due to weak demand.

Its surprising because crude has firmed, one said. But on the other hand, the economy is down and gross [base oil refining] margins are still on the high side. This could mean that individual inventories are high.

ExxonMobil doesnt want to lose market share. Of course, neither do other suppliers, so theyll probably lower prices, as well.