Category: Oil Monitor

WORLD OIL PRICES (April 4-8,2022 trading days)

Reasons for the Price Adjustment¹

• Prices started again to retreat after ban on Russian energy faced opposition in the European Union (EU). The fall was also supported after US EIA data released late-April 6, showing that crude stocks in the country ballooned 2.42 million barrels in the week ended April 1 to 412.37 million barrels. This came as US crude output rose 100,000 b/d to 11.8 million b/d, marking its highest level since December 2021.
  • Prices fell sharply with crude futures trading mid-day on April 7 below $100/b for the first time after March 17 as the IEA announced that member countries have agreed to release 120 million barrels of oil from storage, which includes 60 million barrels from the US, which makes the total SPR release around 240 million barrels
• Gasoline demand in Asia stayed put amid increased driving activity in the region. For instance, Indonesia has loosened travel restrictions for the Ramadan festival, Malaysia has opened its borders on April 1 for international travelers amid rising tourism demand, and gasoline demand in Vietnam was also supported by cuts to environmental protection tax rates intended to combat high fuel prices.
• The Asian gasoil/diesel market kicked off the week of April 11 with a flurry of tender activity, reflecting a strong selling interest from Asian producers with surplus barrels amid robust product cracks.
• Strong product cracks for gasoil continued to incentivize refiners in Asia to maximize its yield and channel excess barrels into the export market, further supported by the steep backwardation in the gasoil market structure discouraging the storage of barrels.

FOREX:Philippine peso appreciated week-on-week against the US dollar by P0.56 to P51.40 from P51.96 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

Effective 12 April 2022, the oil companies implemented a price decrease in domestic oil products. Gasoline has dropped by P1.00 per liter, diesel by P0.35 per liter, and kerosene by P3.00 per liter.

These resulted to the year-to-date adjustments to stand at a net increase of P15.00/liter for gasoline, P25.65/liter for diesel and P21.10/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

_______
¹ Asia Pacific Weekly Recap by S & P Global Platts Analytics

WORLD OIL PRICES (July 26-30, 2021 trading days)

Dubai crude has increased week-on-week by around US$2.00/bbl.  MOPS gasoline and MOPS diesel have also increased by almost US$3.00 per barrel and US$ 2.00 per barrel, respectively.

Reasons for the Price Adjustment

• Oil Prices finished up for the week ending July 30, 2021 and concluded a run of four consecutive positive months.

o Oil posted its fourth straight monthly gain as steady demand and tight supplies calmed concerns that a new wave of Covid-19 infections would cripple energy consumption.

o Futures in New York ended the week 2.6% higher. While cases of the virus’s delta variant have surged in recent weeks, mobility and other data point to strong demand in key economies that traders are watching. India posted the biggest gain in driving activity after restrictions were rolled back.

o Oil futures are closing out a volatile July that saw prices whipsawing as the pandemic threatened to derail the economic recovery. Crude supplies are expected to remain tight through the end of the year..

• ​​​​Overall, crude prices continued to extend its rally during the week on expectations of a weaker dollar and tighter balances stemming from better demand.
   
• The Asian gasoline market strengthened in early July 26 trading, with support from a stronger US Gasoline-Brent pushing the Asian derivative crack spread to a near three-year high.

o Gasoline demand in several major regions has returned to pre-pandemic levels amid rising road traffic data; even the jet fuel market is showing signs of improvement.

o Meanwhile in Asia, the continued delay of the announcement of China’s second round of oil product export quotas has also propped up the motor fuel complex.

o The uptick in volumes was mainly attributed to healthy regional gasoline crack spreads, which prompted Chinese refiners to export some barrels overseas. Sinochem, Zhejiang Petroleum & Chemical and Sinopec each plan to export 100,000 mt, 40,000 mt and 30,000 mt of gasoline in August, respectively.

• Asian gasoil/diesel markets were largely rangebound July 26, with sentiment pulled in opposite directions as rising coronavirus infections in Southeast Asia dented the demand outlook, while spot supply from North Asia was seen to be curtailed for August.

o The upsurge in COVID-19 infections has prompted several countries to announce extensions to coronavirus-related lockdowns and extend restrictions to cover wider areas, moves that were widely expected to dent overall gasoil demand.

• Even as Asia braces for deepening demand destruction for gasoil/diesel, the market has strengthened during the week due to thin supply from North Asia, offsetting sluggish demand.

o China’s oil companies plan to further slash exports of key oil products to a six-year low of 1.07 million mt in August due to limited export quota availability.

FOREX: Philippine peso depreciated week-on-week against the US dollar by P0.02 to P50.33 from P50.31 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

Effective 03 August 2021, the oil companies implemented a price increase in domestic oil products, i.e.  P1.05 per liter for gasoline, P0.75-P0.80 per liter for diesel and P0.75 per liter for kerosene.

These resulted to the year-to-date adjustments to stand at a total net increase of P13.90/liter for gasoline, P11.10/liter for diesel and P9.45/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

WORLD OIL PRICES (June 21-25, 2021 trading days)

Dubai crude has increased week-on-week by around US$1.00/bbl. MOPS gasoline and diesel have also increased by almost US$2.30 and US$0.95 per barrel, respectively.

Reasons for the Adjustment

• Prices of Oil climbed to their highest since October 2018 on expectations that demand growth will exceed supply, and OPEC+ will be careful in returning more crude to the market from August.
• The markets are in strong anticipation for the OPEC+ to meet on July 1 to discuss the further easing of their output cuts starting August. Most analysts feel the producer group has ample space to boost supply without disrupting the drawdown in oil stocks, given the greatly improved demand outlook.
  • The key factors OPEC+ reportedly consider are the strong demand growth in the US, Europe, and China, bolstered by vaccine rollouts and reopening economies.
  • Reports disclosed that OPEC+ is currently holding crude production at 6.2 million b/d (MMB/D), below October 2018 levels and intends to taper this output cut to 5.76 MMB/D in July.
• The prospect on the lifting of Iran sanctions, which was expected to add up supply to the market has dimmed, reportedly due to issues in relation to Tehran’s compliance with the 2015 nuclear deal.
• Crude oil futures settled higher as the market eyed increasingly bullish supply and demand outlooks despite the rapidly spreading coronavirus delta variant.
• Demand recovery, buoyed by the decline in the number of COVID -19 cases and an uptick in vaccination, has boosted the market’s ability to absorb additional supplies.
  • Market analysts noted that even with the increased output, the oil market could remain tight in the near-term owing to the increased travel and strong economic growth in the US and Europe.
• The Asian gasoline market ended the week slightly firmer, lifted by a stronger US- RBOB crack¹, which went on to record a 10 -session high during Asian trade hours.
  • The US stock draw comes as total product supplied for gasoline climbed to a four-week-high 9.44 MMB/D, testing highs last seen in February 2020 prior to the first wave of pandemic lockdowns.
  • Gasoline cracks also moved upwards with ongoing refinery outages that are expected to impact gasoline. 
• Asian gasoil/diesel market fundamentals were largely unchanged, with participants continuing to evaluate the demand-supply situation.
  • The Asian gasoil complex was largely steady from the previous session amid an absence of fresh price signals after a rough trajectory earlier in the week saw the front month structure flip from backwardation ² to contango³.
  • Some participants foresee a bullish market on hopes that narrowing supply balances would inject some strength, while others anticipate the market values reflecting the lackluster demand in the region.

¹ Crack – is an industry term for breaking apart crude oil into the component products, including gases like propane, heating fuel, gasoline, light distillates, like jet fuel, intermediate distillates, like diesel fuel, and heavy distillates, like grease.
² Backwardation – is when the current price, or spot price, of an underlying asset is higher than prices trading inthe futures market.
³ Contango is a situation where the futures price of a commodity is higher than the spot price.

FOREX: Philippine peso depreciated week-on-week against the US dollar by P0.57 to P48.71 from P48.13 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

Effective 29 June 2021, the oil companies implemented a price increase in domestic oil products. Gasoline has increased by P1.00 per liter, P0.65 per liter for diesel and P0.70 per liter for kerosene.
These resulted to the year-to-date adjustments to stand at a total net increase of P11.75/liter for gasoline, P9.90/liter for diesel and P8.40/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

WORLD OIL PRICES (April 19-23, 2021 trading days)

Dubai crude has increased week-on-week by almost US$1.00/bbl. Both MOPS gasoline and MOPS diesel have also increased: gasoline by around US$1.40 per barrel and diesel by nearly US$1.00 per barrel.

Reasons for the Adjustment

• The sour crude market showed signs of cooling amid rising concerns over India’s worsening COVID-19 situation, as the country’s oil demand is hit by second wave of infections and restriction measures. However, second half recovery remains in sight amid widening vaccination rollout.
  • S&P Global Platts Analytics has lowered India’s oil demand growth forecast to 400,000 b/d in 2021 (versus 440,000 b/d last month), with 2021 demand to remain below 2019 levels.
  • The main reasons behind the mild downward revision were: 1) the government of India has no intention to repeat last year’s strict nationwide lockdown and 2) India reportedly has a substantial vaccine production capacity that allows it to administer 130 million shots so far, or about 10% of the total population.
  • Thus, the availability of vaccines will likely lead the government to defer from tough suppression measures, which is positive for oil demand.
• On supply above OPEC+, the US oil production level of 12.8 million b/d (MMB/D) in December 2019 is not expected to be achieved again before late-2023.
  • The severe reduction in drilling and completion activity due to the pandemic coupled with capital discipline is requiring four years for production to reach pre-COVID-19 levels.
  • Longer term production growth (beyond 2023) is dependent on several factors including global demand, well-level break-evens, capital discipline, and shale rock quality.
  • Forecast is predicted at $49/b WTI (constant dollars); variations in prices will result in changes in predictions.​
• For gasoline in Asia, reports disclosed of strengthened gasoline market toward the end of the trading week with the increasing Dubai-gasoline crack spreads amid support for fundamentals from fresh buy tenders.
  • Gasoline markets were sustained by fresh demand from Indonesia. Pertamina bought six parcels of 200,000 barrels each for delivery over May and June via tender while also seeking an additional 350,000 barrels of prompt deliveries for end-April/early-May.
  • Prices showed no sign of COVID-related demand concerns from rising infection numbers in India and Japan.​
• Gasoil/diesel cracks inched higher despite the re-emergence of COVID-related demand fears. The Singapore gasoil vs. Dubai crack reached a seven-week high of $6.16 per barrel.
  • The main concern centered on India, where daily COVID infections have surged to 300,000 cases, about 200% higher than the peak during 2020 that lead to overloaded health care system sand localized lockdowns in some areas.
  • Indian gasoil demand had been on a strong recovery track, back to 1.73 MMB/D or 97% of 2019 levels in 1Q 2021. The second quarter is usually a strong period for agricultural gasoil demand, which should see a limited impact as lockdown measures are so far confined to cities.
  • While the country’s gasoil demand is likely to deteriorate further from the 3% month-on-month decline in first half of April, the government is not repeating last year’s strict national-level lockdown. Thus, Platts Analytics conclude that a repeat of last year’s sharp demand contraction is not expected.​

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 27 April 2021, the oil companies implemented the price increase in domestic oil products. Gasoline has increased by P0.45 per liter, diesel by P0.35 per liter and kerosene by P0.65 per liter.

These resulted to the year-to-date adjustments to stand at total net increase of P7.60/liter for gasoline, P5.70/liter for diesel and P4.95/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

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.

_______

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

_______
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.

WORLD OIL PRICES (March 22-26, 2021 trading days)

Dubai crude has decreased week-on-week by about US$3.50/bbl. Both MOPS gasoline and MOPS diesel have also decreased by around US$4.40 and US$4.10 per barrel, respectively.

Reasons for the Adjustment

• Market analysts see crude prices bottoming out following the sharp increases in the past two weeks, where Dubai crude posted a four-week low of $61/bbl on March 23 but rebounded to above $62/bbl at the end of the week. The market eyed an extended disruption in the Suez Canal and the likelihood that OPEC would hold back supply amid pandemic-weakened demand outlooks affected these increases.
  • A slower-than-expected demand recovery in the first half of 2021 is likely to be offset by an extended runway for OPEC+ supply cuts, US investment bank Goldman Sachs said March 26.

• The Suez Canal remained partly blocked by a lodged container vessel, extended into a fourth day – Friday.
  • Reports said over 60 tankers of crude, product, and LPG are currently waiting on both sides of the passage.
  • From West to East, oil flows are primarily of low-sulfur residual fuel, crude, naphtha, and LPG, while from East to West, movements are mainly of crude and middle distillates. Platts Analytics estimated the two-way crude and product flows through the canal at between 4-5 million b/d in recent months.
  • For Asia, flows of crude from the North Sea and Caspian regions could be disrupted, though the impact may be muted amid deteriorating economics for crude arbitrage. Key crude producers like Saudi Arabia, Russia, Iraq, the UAE, Azerbaijan, Kazakhstan, Norway, Kuwait, Libya, and Algeria rely on Suez Canal to export their crude to both Eastern and Western customers.
  • Refined product trade will also be impacted. The inability to move surplus volumes of gasoil to Europe could push additional Indian and Middle Eastern volumes towards Southeast Asia.

• The Asian gasoline market weakened slightly at the end of the trading week, as an expected influx of cargoes from North Asia combined with a pullback in the US Gasoline-Brent crack weighed on product-crude spreads.
  • Notwithstanding the increasing supply however, evidence of demand recovery in Asia emerged as gasoline outflows from Singapore over March 18-24 jumped sharply by 46% week on week to 716,473 MT, per Enterprise Singapore data of March 25.
  • Indonesia, the biggest importer of gasoline in Asia, is expected to import between 8-9 million barrels of gasoline in April, with Ramadan set to begin mid-month. While the volume is relatively lower compared to 12.3 million barrels during Ramadan time in 2019, it is greater than in May 2020 when imports slumped to 5.9 million barrels at the height of the pandemic.
    • The lingering COVID-19 problems are seen keeping demand below normal.

• The Asian gasoil/diesel market continued to edge lower March 26, with some market participants saying that intermonth spreads were weakening amid growing supply in the region at largely steady demand.
  • China’s gasoil exports in March were expected to rise to 2.29 million MT, an 11-month high, and could reach 2.6 million MT per S&P Global Platts report..
  • The East-West gasoil Exchange of Futures for Swaps (EFS)(1) fell from a one-month high last week to minus $3.13/MT. Conventional East-West gasoil arbitrage economics(2) remain unworkable on paper, but the extreme weakness of VLCC rates has made shipments on new build crude tankers viable.
  • The blockage at the Suez Canal could potentially add further pressure on East of Suez gasoil values by restricting or delaying European-bound cargoes, depending on how long the disruptions drag on.

FOREX:  The value of Philippine peso against the US dollar remains at P48.61, same as 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

Effective 28-30 March 2021, the oil companies implemented the price decrease in domestic oil products. Gasoline has decreased by P1.20 per liter, diesel by P1.30 per liter and kerosene by P1.35-P1.40 per liter.

These resulted to the year-to-date adjustments to stand at total net increase of P6.15/liter for gasoline, P4.60/liter for diesel and P3.50/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.

_______

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

_______

(1) EFS is a transaction negotiated privately in which a futures contract for a physical item is exchanged for a cash settled contract.
(2) It is the simultaneous purchase and sale of the same asset in different markets in order to profit from tiny differences in the asset listed price.