Additional refiners joined the latest round of posted price reductions,with Calumet announcing 5 to 7 cents-per-gallon cuts in Group I and Group IIprices, and ConocoPhillips announcing 5 cent reductions in its Group III line.
Calumetreduced its Group I prices Jan. 15 by 5 cents per gallon on 60, 700 and bright stock, and cut Group II prices by 5 cents per gallon on 80, 150 and 325 viscosity grades. It also reduced its viscosity grade 100 Group II price by 7 cents.
ConocoPhillips announced it would bring down the price of each of its four Group III offerings by 5 cents per gallon effective tomorrow, in line with the recent Group III price cutsby SK. ConocoPhillips is the exclusive marketer and distributor of S-Oil’s Group III base oils in the United States under an agreement reached in 2003.
On the naphthenics side, Cross Oil announced price cuts effective Jan. 12 of 5 cents on viscosity grades below 100 and 7 cents on its vis grades of 100 up through 3,500. Calumet also announced price reductions on all its naphthenics effective Jan. 24 of 7 cents per gallon, except for 5 cent-per-gallon cuts on transformer oil and 60 viscosity grade. The two companies changes followed previously announced price cuts by Ergon and Nynas USA.
Sources said the extreme drop in crude prices has played a key role in the naphthenics side of the market.
We usually do not follow crude in our pricing, one source said. We really look more at the market situation. He added that the crude price had come down so far it has become an influence.
Another source said its ownreduction was both a response to crude price movement and to a discussion with customers about moving pricing after the first of the year. Essentially we discussed stabilizing below a point after the first of the year, the source said.
Another marketer said it seemed premature to bring naphthenic prices down. We dont see any reason to go down, due to the fact supply and demand are so far out of balance, he said. We cant keep up with the demand. He cautioned that what people are seeing now with crude prices is a snapshot in time.
Last week, ConocoPhillipsand S-Oilannounced they added Ultra-S 8 Group III base oil availability at San Pedro, Calif. Their Ultra-S 4 base oil has been available at San Pedro since 2004. S-Oils base oil refinery in South Korea produces the Ultra-S Group III base oils.
Valero Energy ranked 22nd on Fortunes List of 100 Best Companies to Work For, for 2007. More than 105,000 employees from 446 companies responded to a 57-question survey. Fortune lauded Valero for its safety programs, noting that 11 Valero units are among the 23 refineries designated by OSHA as having the best safety programs.
Crude closed at $51.30 per barrel yesterday on the New York Mercantile Exchange, according to Bloomberg. That was $4.34 below the price a week ago.
Historic U.S. posted base oil prices and WTI and Brent crude spot prices are available for purchase in Excel format.