Mobil Oil Corp. yesterday lowered its posted price for the most important U.S. crude oil by 50 cents a barrel in a move that is expected to trigger the second round of price cuts on high-quality domestic oil within a month.
Mobil, the second-largest U.S. oil company, reduced the price it will pay for West Texas intermediate -- the nation's benchmark crude -- by 50 cents to $28.75 a barrel. In the past two weeks, other major oil companies have dropped their buying price for West Texas intermediate by roughly $1 to $29 a barrel.
Analysts predicted the rest of the industry would follow Mobil, which set off the first series of price reductions when it trimmed its posted price for West Texas intermediate on Nov. 1.
"Our people say these changes put us in line with our competition," said a spokesman at Mobil's headquarters in New York.
Mobil also cut its posted prices for other domestic light crudes by between 50 cents and $1.25 a barrel. Each $1-a-barrel drop in domestic crude prices translates into a savings of 2.38 cents a gallon on gasoline and heating oil if passed on to consumers.