October 2022 – PIP – Philippine Institute of Petroleum

WORLD OIL PRICES (September 19-23, 2022 trading days)

The week-on-week price of Dubai crude has decreased by around $1.80/bbl. MOPS gasoline has decreased by almost $6.40 per barrel as well as MOPS diesel and kerosene by nearly $5.40 and $5.00 per barrel, respectively.

Reasons for the Price Adjustment¹

Crude oil prices were largely range-bound in the latest week as risks grew on both demand and supply sides. Oil demand outlook turned weaker on the expectations of slower global economic growth as central banks hiked interest rates to bring down inflation. The US Federal Reserve delivered a third consecutive 75-basis-point hike at the Sept. 20-21 FOMC meeting, lifting target interest rate to 3.00%-3.25%. The move caused US Dollar to rally further, with the ICE US Dollar Index surging to near 111 as of Sept. 23 Asian morning, the highest since June 2002, pressuring down dollar-denominated commodities.

Adding further downward pressure on oil prices was a 9.24-million-barrel build in US commercial oil inventories in the week ended Sept. 16, as total product demand dropped to a 10-week low, according to data from the EIA.

o Total US commercial crude stocks rose by 1.14 million barrels over the week to 430.77 million barrels, though stocks in the country’s Strategic Petroleum Reserve fell to a fresh 38-year low.

o The US Department of Energy announced on Sept. 19 it will sell up to 10 million barrels of oil from the SPR for November delivery. The continuous drawdown since April has left the US SPR level at its lowest since 1984.

Asian gasoline crack weakened further as the market faced a double blow from speculations around rising Chinese supplies due to a potentially larger export quota allocation and regional demand headwinds.

o China’s transportation fuel consumption during the week-long Golden Week National Day holiday at the start of October is expected to be constrained by the authorities’ strict COVID-19 controls, with residents told to avoid travelling.

o Japan’s gasoline demand is set to weaken amid the ongoing typhoon season, causing major disruptions to Japan’s transport system and businesses.

o In Indonesia, a key regional importer where gasoline-powered vehicles are the main mode of transport, is expected to trend lower following a jump in subsidized fuel prices, though the government pledged to hand out a total of 12.4 trillion rupiah in cash to 20.6 million poor families until the year-end to cushion the impact.

Gasoil/diesel supply in Asia became tightened due to ongoing maintenance of regional refineries, all else equal.

o Indonesia’s Balikpapan refinery was scheduled to undergo planned maintenance and expansion works in August for 40 days. This explains why Indonesia’s gasoil imports rose for the second consecutive month in July, surging 40.39% month on month to 287,680 mt with the higher volumes supported by firm buying interest to meet increases in domestic requirements amid post Eid-al Adha festivities as well as ahead of scheduled turnarounds.

o South Korea’s SK Innovation will carry out planned works between the end of September and the end of October at its 840,000 b/d Ulsan and 275,000 b/d Incheon refineries, which could reduce the availability of medium sulfur gasoil in the region.

FOREX: Philippine peso depreciated week-on-week against the US dollar by P0.81 to P57.89 from P57.08 in previous week.

DOMESTIC OIL PRICES

Effective 27 September 2022, the oil companies implemented a per liter decrease in the price of gasoline by P1.65-P1.75, diesel by P1.25, and P1.35 for kerosene.

These resulted to the year-to-date total adjustments to stand at a net increase of P14.85/liter for gasoline, P29.40/liter for diesel, and P24.10/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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¹ Asia Pacific Weekly Recap by S & P Global Platts Analytics