09 February 2007 21:26 [Source: ICIS news]
HOUSTON (ICIS news)--US base oils giant ExxonMobil lowered posted prices by 5-10 cents/gal ($15-30/tonne) across-the-board, effective on Friday, due to lower operating costs and heightened competitive spot activity, market sources said.
This drop brings list numbers to a spread of $2.82-$3.50/gal FOB (free on board) US Gulf coast, and $3.03-3.71/gal FOB ?xml:namespace>
Large consumers said another reason for the downward adjustment was to realign various accounts by eliminating steep discounts and incentive programmes that had previously been used in concluding contractual business.
Sunoco was the only other major Group I producers that announced a similar reduction of 5-10 cents/gal, effective on Monday. Citgo, Valero,
Major Group II producers, including Motiva, Chevron and Flint Hills, have not announced plans to amend posted prices. They have not followed the last two price drops initiated by Group I producers.
One key buyer did not expect Group II producers to make a move either as they had issued decreases several months ago.
Some participants said they were surprised by the timing of the ExxonMobil adjustment as this was the start of the spring buying season and crude oil prices had increased in recent weeks. NYMEX light sweet crude values were over the $60/bbl mark at midday.
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