The Price of Motor Oil

Messages
22
Location
California
With petroleum coming down 25-30% in the last month, shouldn't we be seing oil prices coming down as well? I don't see any sign of it. Petroleum has been so high for so long, it seems to me that the sellers of motor oil are happy to see it stay right where it is. Or am I wrong?
 
Messages
4,245
Location
Kansas
Maybe but then again I went from religious use of redline 5w30 to Pennzoil Ultra and saw a savings. Lets just be happy that it costs less coin for fuel. Money saved to buy more expensive oil. Support our troops through Wounded Warriors & USO.
 
Messages
1,464
Location
Gulf Coast, MS
Its a good point. You would figure it would gave a direct impact on the price of the oil but I sadly don't see it happening. People are not going to yell and scream over engine oil prices. I remember watching a video (believe it was ETCG1). Anyways they where at valvoline (I believe) and they said the oil base for engine oil was pretty much useless. Only thing it can really be used for was engine oil. I was surprised to hear that. From what I understand once they extract all the gasoline/diesel/jet fuel what ever they are doing with it the by product of that is used for the engine oil base.
 
Messages
6,179
Location
Texas Hill Country
How much do you want to pay? A 5 quart jug of Mobil Super is $12.97 at walmart. I mean, I remember back in the day Havoline and Supertech was $9.87 for the jug, but that was ten years ago. So the prices are 2-3 dollars more per jug, and the quality has gone up. I mean if you walk into a parts store and buy quarts of motor oil, they are stupid 4-6 bucks per quart. You need to go to walmart or a club store and get the deals.
 
Messages
2,011
Location
War Eagle
So a barrel of oil has roughly 35 gallons of crude oil. And it costs $75 roughly. That comes out to 2.14 per gallon of crude. Or 54 cents per quart. Then they have to remove impurities like wax, unusable other products, etc. I am going to guess 5-10% unusable. So that make a quart of crude worth about 60 cents a quart. Then they refine it where they separate gasoline, diesel, other lubricants, and base oils. I do not know what that costs. Then they take the base stocks and add the additive package, bottle it, ship it to store, place it on shelf and then sell it. Now in my neck of the woods gas has dropped to 2.65 from about 3.25 a gallon for a savings of about 18-19%. Of course gas cant fall the same % as crude due to applied taxes. The amount of oil sold is way less than gasoline. And I doubt the add packs have come down in cost and they make up roughly 16-18% of a quart of oil. With all the oil sold at places like Walmart, advance auto, auto zone, etc who have to pay for buildings and employees, it is no surprise to me that a quart of oil has not had any price decrease. I am sure the oil company makes a little money off of base stocks. But no where near the amount off the other components of crude. I would bet that places who sell the oil make a lot more money and they have the human employees. Should we see a drop in a quart of oil? Maybe so. But I doubt we will. Even if we did see a 10-15% drop in price, that is only 50 cents a quart. I will take the drop in gasoline any day. I am not saying you are wrong to expect a drop in motor oil, and I do hope it happens eventually. But I will be surprised if it does happen. Mainly because I think those who sell it will keep the extra % in their pockets. Anyways that is my 2 cents worth on the topic. I am enjoying the drop in fuel prices myself. I would also hate to see a drop in motor oil prices because my stash would then have less value on the open market. Just kidding. Enjoy lower fuel costs while you got it
 
Messages
2,060
Location
America's Dairyland
Originally Posted By: JustinH
How much do you want to pay? A 5 quart jug of Mobil Super is $12.97 at walmart. I mean, I remember back in the day Havoline and Supertech was $9.87 for the jug, but that was ten years ago. So the prices are 2-3 dollars more per jug, and the quality has gone up. I mean if you walk into a parts store and buy quarts of motor oil, they are stupid 4-6 bucks per quart. You need to go to walmart or a club store and get the deals.
I remember when there were no jugs and was surprised when conventional went over $.99 and M1 synthetic I was buying went over $3.99. $20 for an oil change? You gotta be crazy! I don't think the price will go down...do you think that all the plastic toys in the stores are now cheaper?
 
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Messages
59
Location
NJ
I often wonder if walmart makes any money on oil or if they are selling it at cost or maybe less to get you in there and buy items with a larger margins. They sell oil for almost half the price of stores like AAP an AZ at times but usually about 1/3 to 1/4 when not on roll back. That's on 5qt jugs though because I think there quarts are about on par with anywhere else.
 
Messages
2,573
Location
Deep in the heart of Jersey
You have to wonder about gas and oil pricing. If there is a possibility of something being volatile in the world, the price of gas and oil goes up overnight. But, when the price of a barrel of oil drops, it takes months to see a reduction in price. And why is the price of diesel more then premium gas? It used to be cheaper then regular gas. For what you spend on a gallon of diesel, you could go just as far if you spend the same for gas.,,
 
Messages
2,011
Location
War Eagle
BigCahuna I always wondered about timing as well. Don't know why gas goes up quickly and down so slowly. Bet is has to do with the actual pumping stations squeezing all they can out of gas and waiting for competition to lower their price before they do. On the up side, raise price quickly and make more money. If you don't pump as much right away, well it just stays in the tank for another day
 
Messages
9,559
Location
Boston, MA
Originally Posted By: Chuckinator
I often wonder if walmart makes any money on oil or if they are selling it at cost or maybe less to get you in there and buy items with a larger margins. They sell oil for almost half the price of stores like AAP an AZ at times but usually about 1/3 to 1/4 when not on roll back. That's on 5qt jugs though because I think there quarts are about on par with anywhere else.
They sell a lot (and we have to include Sam's Club in the calculation) so they buy a lot and can dicker on price. I'll bet their sometimes unpredictable stocking selections are due to their ability to "take a bit of surplus inventory off the manufacturers hands" from time to time. Their grocery stocking system in the "Super Walmarts" apears to function the same way. There will be a TON of one brand's flavor of a soup and NONE of another flavor, just an empty spot on the shelf.
 
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Messages
9,559
Location
Boston, MA
The market price for oil, currently about 75 bucks, is not what oil companies like Mobile pay THEMSELVES for the crude they produce from their own wells. The market is based on "spot" prices which depend on, say, how much extra heating oil is needed in the Northeast in a cold snap. Even OPEC, a cartel, doesn't charge everybody the "market price" there are long term contracts entered into which are used as a hedge. The Saudi's, for example, need to sell oil to keep their social programs going and prevent "domestic disorder".
 
Messages
9,559
Location
Boston, MA
Originally Posted By: toneydoc
BigCahuna I always wondered about timing as well. Don't know why gas goes up quickly and down so slowly. Bet is has to do with the actual pumping stations squeezing all they can out of gas and waiting for competition to lower their price before they do. On the up side, raise price quickly and make more money. If you don't pump as much right away, well it just stays in the tank for another day
There are franchise gas stations (fewer every year) and "company stations". The price at big company owned gas stations is often changed more than once a day if necessary. One big vendor can control the price at a factory store pump directly from their headquarters, without the attendant doing a thing other than changing the price posting in states where the law requires it. Sometimes they get behind on that if they are busy. Ya gotta look at the pump. When they are selling less gas in upstate New York because of the snow, they make a price "adjustment" elsewhere so the stuff doesn't back up in their delivery system. Lucky is the consumer when all the big guys have to dump some inventory at the same time and a real price war starts.
 
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Messages
557
Location
MA
Originally Posted By: 901Memphis
The prices aren't going to drop much if any.
That would be unfortunate. Do you know for sure why the motor oil prices will not drop ?
 
Messages
2,744
Location
San Antonio, TX
Absolutely! At minimum used motor oil has its BTU heating value and viscosity value for blending into bunker fuel. As recycled oil for re-refining base stock (like at Safety Kleen), it likely has another competing value, but more limited market / volume demand. I'd seen a graph showing around 70% of used motor oil is blended into bunker fuel when recycled, but I don't remember the date on that graph offhand. I think the graph was specific to the USA. I expect the percentage blended into bunker fuel will increase with Valvoline dropping use of re-refined used motor oil. I remember when Safety Kleen tried marketing their re-refined motor oil at the retail level in Walmart. It cost more than Supertech and didn't stay on the shelves very long.
 
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