WORLD OIL PRICES (March 29-April 02, 2021 trading days)

Reasons for the Adjustment

• On the 15th ministerial meeting on 01 April 2021, it was agreed that OPEC+¹ will raise production by 350,000 b/d in May and June, and 400,000 b/d in July for a cumulative increase of 1.1 million b/d.²
  • In parallel, Saudi Arabia will phase out most of its additional cuts by end-July, raising production by 250,000 b/d in May, 350,000 b/d in June and 400,000 b/d in July.

• OPEC+ has chosen a middle course by opting to increase supply but doing so in a staggered manner. It has also removed uncertainty from the market over what is likely to be a period of accelerating demand over the summer.

  • Platts Analytics sees global oil demand accelerating by over 7.2 MMB/D over the May-July period led by an accelerating recovery in the US.

  • Notwithstanding the OPEC+ decision, Platts Analytics continue to see global balances as conducive to higher prices and stock draws over the next few months.

• The Asian gasoline market was supported on the first trading day of April, with crack spreads hovering near 13-month highs as a US gasoline stock draw continued to fuel optimism in the overall development.
  • The sustained strength in Asian gasoline comes as bullish news from the West on late March 31, following data released from the US Energy Information Administration that showed a 1.74 million-barrel stock draw in US gasoline inventories.
  • Unplanned regional outages were also fuelling bullish sentiment in Asia.
    • Indonesia’s 125,000 b/d Balongan refinery was reported to have only extinguished the fires at its facility late March 31, with a total of four of the refinery’s 72 storage tanks having been affected by the incident. A total of 100,000 kiloliters of capacity had been lost in the fire that broke out on March 29.
    • In Japan, all units at ENEOS Wakayama (127,500 b/d) were shut following a fire incident on March 29. The fire started at a 39,000 b/d fluid catalytic cracker unit (FCC), which could impact gasoline and naphtha output. The fire was extinguished quickly, but there are no details yet for a restart.
  • Asian gasoline was also supported by reports that several ships had been placed on subjects to move gasoline out from the Middle East to Western and African destinations.

• On Diesel, the removal of the Suez Canal blockage will relieve some pressure as the flow from India and the Middle East to Europe will now resume.
  • However, the incident could have a continued impact as displacements caused by ships delayed or rerouted around the Cape of Good Hope result in higher freight rates and reduced vessel availability through April and May.
  • According to Platts data, rates for the West India and Arab Gulf to UK Continent routes are currently at a 10-month high. Higher freight costs make already unfavorable East-West arbitrage economics even less attractive. This, in turn, has resulted in Asian gasoil barrels remaining stuck within the region even as demand plateaued.

FOREX: Philippine peso appreciated week-on-week against the US dollar by P0.11 to P48.50 from P48.61 in previous week.

Other recommended reference sites:
    • http://www.aip.com.au/pricing
    • http://www.indexmundi.com/commodities/?commodity=crude-oil-dubai
    • https://www.quandl.com/data/ODA/POILDUB_USD-Dubai-Crude-Oil-Price  

DOMESTIC OIL PRICES

These resulted to the year-to-date adjustments to stand at total net increase of P6.80/liter for gasoline, P4.65/liter for diesel and P3.55/liter for kerosene.

For the updated prevailing retail pump price, please browse this link: https://www.doe.gov.ph/price-monitoring-charts?q=retail-pump-prices-metro-manila.

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For more information, call the

Department of Energy
Pricing: 840-2187
LPG: 840-2130
Fuels: 840-5669
SMS: (0915) 4469421
Email: oilmonitor@doe.gov.ph
Website: https://www.doe.gov.ph

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¹ OPEC+ is a group of 24 oil-producing nations, made up of the 14 members of the OPEC, and 10 other non-OPEC members, including Russia.
² The Meeting emphasized the ongoing positive contributions of the Declaration of Cooperation (DoC) in supporting a rebalancing of the global oil market, in line with the historic decisions taken at the 10th (Extraordinary) OPEC and non-OPEC Ministerial Meeting on 12 April 2020 to adjust downwards overall crude oil production, and subsequent decisions.