Source: DOE Website

WORLD OIL PRICES (January 18-22, 2021 trading days)

Reasons for the Adjustment

• With weak oil demand in Europe and the US, market analysts fear of renewed lockdowns in China could further weaken the demand outlook for oil and oil products.
  • A new outbreak of coronavirus in some Chinese cities has sparked fears that the country could experience another wave of the pandemic.
  • Chinese authorities have imposed mobility restrictions in affected cities, including Beijing, and have called on citizens to refrain from travel during the upcoming Lunar New Year holiday.
  • Thus, China’s oil demand to see a sharp month-on-month decline of 1.3 million b/d in February.

• On the other hand, Algerian Energy Minister Abdelmadjid Attar said that global vaccination campaigns and the resumption of international air traffic will support oil prices within $55-$60/b in the near term, but OPEC will be closely watching for clearer signals from new US President Joe Biden on whether he will ease sanctions on Iran and Venezuela.
  • Any relief in the sanctions could unleash crude volumes that would complicate the producer bloc’s efforts to rebalance the market amid a still fragile global recovery from the coronavirus pandemic.

• Sentiment around gasoline demand is unpromising with COVID-19 infections and associated measures are trending upwards in Indonesia, Malaysia, Japan, and China.
  • Asia’s largest gasoline importer Indonesia is expected to import around 8 million barrels of gasoline in February as local demand was seen to have steady recovery through to the end of 2020.
  • But with daily infections recently surging to the highest on record, the government has been pushed into new lockdown measures covering Jakarta, the rest of Java, and Bali.  Hence, the outlook for Indonesian demand remains uncertain in the near term.
• The diesel market outlook appears more uncertain, with some sources saying that the sentiment could turn more bearish ahead of expectations of a slowdown in activity across large parts of the region ahead of the Lunar New Year holidays.  The situation may further be compounded by still healthy gasoil export flows from China over February.
  • The conditions of low refinery runs, depressed demand, and closed arbitrage to Europe has left markets unresponsive to recent cold weather, which would traditionally be a positive driver for gasoil values (it being used as heating fuel).
  • Regional balances could begin to tighten when spring refinery maintenance season begin to kick in. Some refiners may opt to start turnaround earlier because of current weak margins and demand.

FOREX: Philippine peso appreciated week-on-week against the US dollar by P0.01 to P48.06 from P48.07 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

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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