WORLD OIL PRICES (May 31-June 4, 2021 trading days)

Dubai crude has increased week-on-week by almost US$2.40/bbl. MOPS gasoline and diesel have also increased by around US$0.85 and US$2.00 per barrel, respectively.

Reasons for the Adjustment

• Oil prices rose to a two-year high on stronger demand prospects, as OPEC+ succeeded in draining global oil inventories and the successful rollout of vaccine programs continued.
  • Plans to gradually increase production in July were already factored into oil prices ahead of the OPEC+ meeting, driven by expectations that recovering summer travel demand and the reopening economies will easily accommodate the gradual increase.
  • OPEC+ output cuts also helped to offset significant second-half stock draws, which is a strong bullish factor supporting an extremely tight market ahead, amid post-pandemic optimism about rising oil demand in the US, China and Europe.
  • While Brent crude price finally rose above the $70 mark amid tighter oil market prospectsanalysts said it is not yet clear if the crude would move higher to make the $70 mark a base level.

• With the OPEC+ June 1 meeting, the group still forecasts a 6 million bpd (MMBD) increase in oil demand in 2021, equivalent to 6% of global consumption, as the world recovers from the COVID-19 pandemic.¹
  • OPEC+ cut output by a record 9.7 MMBD last year as demand collapsed when the COVID-19 pandemic first struck.
  • In the recent meeting, OPEC+ agreed to stick to the existing pace (agreed on April 9) of gradually easing supply curbs through July.
  • OPEC+ decided in April 2021 to return 2.1 MMBD of supply to the market during May through July as it anticipated demand would rise despite high numbers of coronavirus cases in India.
  • Thus, supply curbs will still in place to stand at 5.8 MMBD by July.

• At the recent OPEC+ ministerial meeting, OPEC officials downplayed the potential impact of the lifting of Iran nuclear deal.²
  • Platts also stressed its minimal impact on supply balances.
  • The resulting deal could add over 1.1 MMBD of additional Iranian exports onto the market by year-end.
  • Prices gained even with as US and Iran continues to talk towards a new nuclear deal that is expected to lift current sanctions on Iran’s oil exports.

• In Asia, an influx of gasoline cargoes from non-Chinese sources increased the light distillate inventories in the city-state to its highest in four months in the week ended June 2.
  • Enterprise Singapore data showed light distillate stocks up by 8.73% to 13.615 mill barrels amid the spike in gasoline inflows from South Korea and India.
  • More spot tenders from oil companies were seen offering 92 RON gasoline for loading next month-June.

• The Asian gasoil/diesel complex ended the trading week with higher prices amid expectations of a tightening regional supply balance due to reduced spot availability from China.
  • Outflows of supply from the key exporter-China was reduced as Chinese refiners shift their focus to fulfil domestic requirements following the new levies imposed on blendstocks including light cycle oil effective June 12.
  • The scheduled refinery turnarounds and reduced run rates at several refineries in the region in response to poor domestic and international demand also resulted to limited supply inflows into Singapore.
  • Asia’s main trading hub in Singapore saw commercial middle distillate stocks falling 7.9% week on week to 11.47 million barrels over May 27-June 2, marking its lowest in 15 months, according to data released by Enterprise Singapore late on June 3.

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

Effective 08 June 2021, the oil companies implemented a price increase in domestic oil products.  Gasoline has increased by P0.20 per liter, diesel by P0.55 per liter and P0.60 per liter for kerosene.

These resulted to the year-to-date adjustments to stand at a total net increase of P9.50/liter for gasoline, P8.15/liter for diesel and P6.70/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.

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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¹www.reuters.com/business/energy
² S & P Global Platts’ Asia Pacific Weekly Recap dated 04 June 2021