Valero on Dec. 4 announced reductions of 5 cents per gallon in the 150 neutral through bright stock range, and 7 cents on its 100 neutral, effective that day. In addition, Valero cut the price on its lone Group II base stock by 5 cents.

Citgo announced price cuts that went into effect last Friday, with 5 cent drops on Group I paraffinic base stocks from 150 neutral through bright stock. It also announced 7 cent price cuts for 85 and 100 neutrals.

SK yesterday announced an across-the-board decrease of 5 cents per gallon for its Group III offerings, effective Jan. 15.

In the naphthenics market, Ergon announced price cuts effective today of 5 cents per gallon on its 60 viscosity grade, and 7 cents on grades 100 through 2,000. Nynas USA announced list price reductions effective Jan. 15 of 5 cents per gallon on 60 grade and 7 cents on all other grades, from 100 through 2,400.

San Joaquin told Lube Report it had no plans to reduce prices.

While its unusual to spring a posting change on New Years day, a source said that it makes more sense in light of what ExxonMobil said in the fall about its incentive program. He said ExxonMobil as far back as November told customers it was looking to restructure its performance incentives program, in which contract customers can earn a rebate for hitting various volume thresholds. This source and others said the company indicated it would do a restructuring of the program to eliminate the rebate and eventually replace it with a flat discount.

What they claimed was that it was administration streamlining, and was to reduce the workload, one source said. For most buyers, theyll get a 5 cents lower price now but theyve also lost a rebate. Its not so much of a price decrease on that basis.

One marketer deemed it confusing that other companies were responding to ExxonMobils cuts – unless they were unaware of the change in the incentives program.

On this one theres no small amount of confusion on what the impact to net pricing actually is, he said. Just before the holidays ExxonMobil sent a letter announcing posted price changes would be effective January 1. But they also pulled back and withdrew some incentives they had offered off of invoice. The net effect of what these price changes actually mean to ExxonMobil customers I think is suspect.

He said the net result of ExMos posted price change is really no change to the net pricing for most customers. I can tell you, whether youre a million or five-million-gallon customer, youre not getting any rebate as of today, he said. So the only thing youre getting is the 5 cents or 7 cents per gallon change to the posting. To most of their customers this change means nothing or very little.

So its a little unclear to me what the driver behind all of these other changes we see, he said. Either they didnt know ExxonMobils position was what it was, or their changes are perhaps accurately reflecting some length in the marketplace.

The source acknowledged some other companies could be contractually obligated to follow ExxonMobils posting changes.

The price of crude oil on the New York Mercantile Exchange closed yesterday at $55.64 per barrel, according to Bloomberg. That was $5.12 less 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.