Source: DOE Website

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WORLD OIL PRICES (March 1-5, 2021 trading days)

Dubai crude has decreased week-on-week by almost US$0.20/bbl. Both MOPS gasoline and MOPS diesel have also decreased: gasoline by around US$0.25 per barrel and diesel by nearly US$1.30 per barrel.

Reasons for the Adjustment

• Saudi Arabia and OPEC+ alliance announced a rollover of production cuts after its meeting on March 4, contrary to market expectations of easing output cuts amid steady global demand recovery. The announcement, sparked bullish sentiment in the Middle East crude markets.

• The OPEC+ alliance, which controls about half of the world’s production capacity, will mostly maintain its quotas, with Russia allowed a 130,000 b/d increase and Kazakhstan a 20,000 b/d rise, while Saudi Arabia said it would continue implementing its 1 million b/d (MMB/D) voluntary cut.
  • It means the group will keep about 8 MMB/D of crude production, or roughly 8% of pre-pandemic supply, off the market for another month.
  • Economic uncertainty prompted the producer group to maintain its cuts instead of unleashing production, with many potential pitfalls ahead, including an uneven vaccine rollout and stringent lockdown measures that are a damper on oil demand.
  • The OPEC+ decision to keep back April supply will clearly trigger tighter markets, as April loaders will be needed for increased summer refinery runs.
  • The alliance will meet next April 1 to decide on May output levels.

• Platts Analytics forecast global oil demand to grow by 250,000 b/d in April over March, before surging 1.9 MMB/D higher in May and another 3.3 MMB/D in June.

• Gasoline in Asia softhened as cargoes were being spotted flowing out of Asia.
  • Industry sources have noted the opening of the arbitrage route for gasoline cargoes to be shipped to West Africa, as the East-West spread(1) dropped sharply since the Winter Storm Uri in late-February; thus had sharply strengthened the West gasoline complex.
  • Also, Japan’s largest refiner ENEOS said that it only intends to restart its 145,000 b/d Sendai refinery in northeast Japan in the first half of April, which had previously been suspended due to the strong earthquake offshore Fukushima late Feb. 13.

• Analysts see the narrowing day-by-day of the backwardation(2) in the gasoil (diesel) complex, resulting to growing supply length in the Asian gasoil market that is weighing on market sentiment.
  • Higher gasoil exports from China over March was seen to have partly attributed to the gasoil market softening as Chinese refineries are reportedly planning to boost gasoil exports in March to about 2.3 million MT in a bid to offset inventory pressure.
    • Gasoil stock levels in china were notably high due to high throughput in February and weak consumption over the Lunar New Year period.
    • The four key state-owned oil refineries’ utilization was at a sevenmonth high of 82.8% in February while private refineries kept their runs stable from January.

    • The country’s COVID-19 control measures also led to lower consumption and higher exports.

       

FOREX: Philippine peso appreciated week-on-week against the US dollar by P0.06 to P48.58 from P48.64 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

The oil companies implemented the price decrease effective today, 09 March 2021. Gasoline has decreased by P0.10 per liter, P0.35 per liter for diesel and kerosene by P0.55 per liter.

These resulted to the year-to-date adjustments to stand at a net increase of P6.10/liter for gasoline, P5.35/liter for diesel and P4.50/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  East-West spread is the measure between European and Asian gasoline prices
2  Backwardation – is when the futures price is below the expected future spot price