This week ushered in another round of price cuts of between 10 and 30 cents per gallon put forth by ExxonMobil, Sunoco and Valero. This news surprised many of the companies customers as it was the second downward adjustment in only a few weeks time.
ExxonMobil shaved its API Group I and II+ postings effective Monday, Nov. 10, according to direct buyers. The company reduced its Group I 100, 150, 330 and 600 vis grades by 10 cents/gal, while lowering its 275 by 30 cents/gal. The major also dropped Group II+ EHC 45 and 60 neutrals by 20 cents/gal. Bright stock was not altered from the Oct 28 revision and the posted price remains unchanged.
The reasoning behind these particular adjustments was to realign posted prices, according to a few participants. Other Group II, II+ and III producers had moved prices a greater amount several weeks ago, but the ExxonMobil moves in late October were not of the same magnitude, sources pointed out.
A few buyers noted that ExxonMobil remains on a sales allocation for its Group I 275 solvent neutral and EHC 30 grades, and will continue to operate under a general sales control plan on other base stocks.
Sunoco followed suit yesterday, Nov. 11, pushing down its Group I posted prices by 10 cents/gal for all grades but bright stock.
Valero will also knock 10 cents/gal off all Group I and II postings, with the exception of bright stock, effective Thursday, Nov. 13.
Paraffinic spot trade remains somewhat thin given the absence of readily available large amounts of base oils. In most cases contract buyers are receiving all necessary requirements and there are no delays in most shipments. There are a few producers who continue to operate under sales control plans and therefore certain grades remain tight and are not available for spot trade.
Meanwhile, the overall market is fairly quiet as most players were headed to Houston to attend the annual NPRA International Lubricants and Waxes meeting commencing Thursday. In addition to the NPRA conference, a number of other industry-related functions were keeping participants away from the workplace earlier in the week, which also curbed potential business transactions for the immediate near term.
At the close of the Tuesday, Nov. 11, NYMEX session, light sweet crude futures ended at $59.33 per barrel, a substantial loss of $11.20/bbl from the week-earlier settlement at $70.53/bbl.
Carolyn L. Green, based in Houston, can be reached directly at carolynlgreen@gmail.com.
Historic U.S. posted base oil prices and WTI and Brent crude spot prices are available for purchase in Excel format.