Motiva still has no company for the price cuts it announced June 18. No other Group II supplier followed the companys lead, and some said it is possible that none will.
Motiva surprised many market observers 12 days ago when it said it would lower posted prices for its Group II and Group II-plus stocks by 2 cents to 5 cents per gallon. Base oil prices have been heading only upward for more than a year, but the company said it was marking down to encourage motor oil blenders to switch early to the new GF-4 passenger car motor oil specification.
None of the half-dozen other companies that post Group II or Group II-plus prices have announced movements. While allowing that they are watching the situation closely, some maintained that current market conditions do not support cuts.
If you look at refinery economics and the supply-demand situation, our own situation doesnt warrant it, one marketer said. Of course, if the rest of the market starts to go along with it, then refinery economics and supply-demand go right out the window.
Sources said Motivas cuts give it a pricing advantage over competitors, but at the same time have also cut into the companys margins.
The price of crude oil on the New York Mercantile Exchange closed at $35.72 per barrel yesterday, $2.53 lower than a week earlier.
Historic U.S. posted base oil prices and WTI and Brent crude spot prices are available for purchase in Excel format.