Oil Monitor – Page 3 – PIP – Philippine Institute of Petroleum

Posted on: June 9, 2021 by pip_admin

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.

FOREX: Philippine peso appreciated week-on-week against the US dollar by P0.28 to P47.76 from P48.05 in previous week.

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

_______

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

Posted on: May 3, 2021 by pip_admin

Source: DOE Website

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.&ZeroWidthSpace;
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.&ZeroWidthSpace;
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.&ZeroWidthSpace;

FOREX: Philippine peso appreciated week-on-week against the US dollar by P0.12 to P48.37 from P48.50 in previous week.

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

Posted on: April 6, 2021 by pip_admin

Source: DOE Website

WORLD OIL PRICES (March 29-April 02, 2021 trading days)

Dubai crude has increased week-on-week by about US$0.60/bbl. Both MOPS gasoline and MOPS diesel have also increased by around US$2.00 and US$0.25 per barrel, respectively.

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.

DOMESTIC OIL PRICES

Effective 6 April 2021, the oil companies implemented the price increase in domestic oil products. Gasoline has increased by P0.65 per liter while diesel and kerosene also increased by P0.05 per liter.

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.

Posted on: March 31, 2021 by pip_admin

Source: DOE Website

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.

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.

Posted on: March 15, 2021 by pip_admin

Source: DOE Website

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.

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.

_______

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 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

Posted on: February 17, 2021 by pip_admin

Source: DOE Website

WORLD OIL PRICES (February 8-12, 2021 trading days)

Dubai crude has increased week-on-week by almost US$3.00/bbl. Both MOPS gasoline and MOPS diesel have also increased by around US$2.30 and US$3.70 per barrel, respectively.

Reasons for the Adjustment

The International Energy Agency (IEA) in its Feb. 11 Oil Market Report pointed to a tightening oil market this year, despite lowering its estimate of the recovery in global oil demand and seeing improving non-OPEC supply growth.
- The IEA predicts global oil demand will grow by 5.4 million b/d (MMB/D) in 2021 to reach 96.4 MMB/D, noting this would be around 60% of the volume lost to the pandemic in 2020.
- This is the fourth straight month the IEA has lowered its demand outlook given the challenges the world has, brought about by COVID-19. IEA however could see optimism in the second half of the year.

On prices, crude oil edged higher with investors expecting stronger demand for oil in Q2 amid the accelerating global vaccination program while compliance with agreed OPEC+ production cuts seemed to be holding..
- Some analysts thought $60/bbl level could not be reached until a couple years down the road, but “the key whether the crude price rally continues is if we don’t see a spike in COVID-19 cases and as restrictive measures are eased” a market analyst noted.
- But according to Platts Analytics, energy producers remain skeptical of the recent uptrend in crude prices, with retail investors also expecting prices to correct downward in the near term.

For gasoline, while prices reached about US$65/bbl early in the week, the Asian gasoline market softened as the week ended, ahead of the Lunar New Year holidays. Reports disclosed signs of weakening fundamentals as well as a retreat in the US gasoline-Brent crack exerted downside pressure on the motor fuel complex.
- The weaker fundamentals were reportedly led by more spot supply, with India’s state-run Mangalore Refinery and Petrochemicals Ltd., or MRPL, having emerged to offer 35,000 MT of 95 RON gasoline for loading March 15-17 from New Mangalore in a tender that closes on Feb. 17.
- Indian gasoline demand, which according to Platts had helped support the overall complex through December 2020 and early January, also showed signs of a slowdown, as domestic gasoline consumption in whole month January fall 3.54% (89,000 MT) vis-à-vis December 2020.
- Also exerting downside pressure was a weakening in the US gasoline-Brent crack due to latest data released by the US Energy Information Administration (EIA) which showed gasoline stocks climbing 4.3 million barrels the week ended Feb. 5.
- The inventory uptick was just shy of the 4.8 million barrels estimated by the American Petroleum Institute and far higher than the 2.7 million barrels anticipated by analysts surveyed by Platts.

Asian gasoil (diesel) market was reported steady with thinning supply and firm demand providing support to the complex and keeping it in a backwardated¹ structure.
- Sentiment in the Asian gasoil market was also supported by reports that ExxonMobil Australia plans to shut its 80,000 b/d refinery in Melbourne and convert it into a fuel import terminal; traders said that gasoil exports into Australia looks set to continue rising on the back of the announcement.
- There were also reports saying that lean production volumes from Japan and South Korea, and upcoming refinery turnarounds, could serve to cushion the impact of the bigger exports from China.
- Thus, Asian gasoil balances are likely to have further tightening over the next few months as upcoming refinery maintenance operators may opt for earlier and longer turnarounds due to the depressed margins.

FOREX: Philippine peso appreciated week-on-week against the US dollar by P0.02 to P48.04 from P48.06 in previous week.

DOMESTIC OIL PRICES

The oil companies implemented their price increase effective today, 16 February 2021. Gasoline has increased by P0.75 per liter, P1.25 per liter for diesel and kerosene by P1.10 per liter.

These resulted to the year-to-date adjustments to stand at a net increase of P4.00/liter for gasoline, P3.90/liter for diesel and P3.35/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 Market condition where the forward or futures contract price of a commodity (or oil) traded below the expected spot price at contract maturity.

Posted on: January 28, 2021 by pip_admin

Source: DOE Website

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

Dubai crude has decreased week-on-week by almost US$0.50/bbl. Both MOPS gasoline and MOPS diesel have also decreased: gasoline by about US$0.65 per barrel and diesel by around US$0.30 per barrel.

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

The oil companies implemented their price decrease effective today, 26 January 2021, i.e. gasoline by P0.15 per liter and P0.10 per liter decreased both for diesel and kerosene.

These resulted to the year-to-date adjustments to stand at a net increase of P2.15/liter for gasoline, P1.55/liter for diesel and P1.50/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

Posted on: January 18, 2021 by pip_admin

Source: DOE Website

WORLD OIL PRICES (January 4-8, 2021 trading days)

Dubai crude has increased week-on-week by around US$2.00/bbl. MOPS gasolineand MOPs diesel have also increased: gasoline by about US$2.60 per barrel and diesel by nearly US$0.90 per barrel.

Reasons for the Adjustment

Saudi Arabia and its OPEC+ partners jolted prices higher on Jan. 5 by adjusting February and March production plans well below market (and Platts Analytics’) expectations.
- Platts Analytics initial analysis indicates OPEC+ forecast will be reduced by over 1.5 million b/d (MMB/D) in February-March, with the overwhelming majority of the revision coming from Saudi Arabia.
- Saudi Arabia’s clear determination to support short-term markets through an additional 1MMB/D cut, with Brent already above $50/b, far outweighs Russian reluctance to even freeze output for now.

Following the OPEC+ announcement, Saudi Aramco announced its official selling prices (OSPs) to Asia for February-loadings; prices to Asia were increased as expected, by between 20-70 cents/b.
- This likely reflects the impact of the additional production cuts, the bulk of which will likely come at the expense of supply to Asia, which account for over 70% of Saudi exports.
- Asian buyers have responded rapidly to the Saudi actions, with spot prices for alternative Russia and Middle Eastern grades rising. The Dubai spread jumped to an 11-month high, reflecting the broad strength in the Asian-focused sour crude market.

An overnight crude price rally extended in mid-day US trading Jan. 8 as expectations of robust stimulus spending from the incoming Biden administration offset a weaker-than-expected US jobs report.
- According to media reports US President-elect Joe Biden said his administration’s stimulus package would be in the trillions of dollars.

Markets were also still riding a wave of optimism sparked by tightened crude supply outlooks.
- Data released by the US-EIA showed a sizable 8.01 million-barrel draw on US crude stocks for the week ending Jan. 1. The larger-than-expected draw came after Saudi Arabia announced at the end of the meeting of its voluntary slashing February and March crude production by 1 MMB/D.

The Asian gasoline market stayed firm at the end of the trading week Jan. 8, with another fresh bout of support from the West keeping crack spreads steady.
- The uptick came after supportive news emerged on the international oilmarket front, with Saudi Arabia’s announcement.
- This 1 MMB/D decline in production would more than compensate for the combined 75,000 b/d increase granted to Russia and Kazakhstan in February and March during the meeting, especially since all other members are expected to hold their production steady.

For gasoil/diesel, Platts report on Jan. 6 stated that European demand was set to remain depressed over the next few months, with new announcements of lockdowns and extensions to existing restrictions heaping bearish sentiment on the European gasoil complex.
- Demand concerns in Europe have returned to center stage as tightening movement restrictions were set to hamper fresh requirements. England, on Jan. 5, entered its most stringent nationwide lockdown since March in a bid to curb surging coronavirus infections, including a new highly transmissible strain that is threatening to choke the country’s healthcare system, while Germany is likely to extend its lockdown until the end of January.
- On the other hand, the Asian gasoil market has been supported by consistent demand from Australia as well as pockets of demand from Southeast Asia, thus helping the Asian gasoil market to remain relatively steady.

FOREX: Philippine peso depreciated week-on-week against the US dollar by P0.02 to P48.05 from P48.03 in previous week.

DOMESTIC OIL PRICES

The oil companies implemented their price increase effective today, 12 January 2021, i.e. gasoline by P0.85 per liter, diesel by P0.30 per liter and kerosene by P0.25 per liter.

These resulted to the year-to-date adjustments to stand at a net increase of P1.30/liter for gasoline, P0.60/liter for diesel and P0.65/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

Posted on: October 30, 2020 by pip_admin

Source: https://www.doe.gov.ph/oil-monitor

WORLD OIL PRICES (October 19-23, 2020 trading days)

Dubai crude has increased week-on-week by a little of US$0.03/bbl. On the contrary MOPS gasoline and diesel have decreased; MOPS gasoline by about US$0.15 per barrel and MOPS diesel by around US$0.90 per barrel.

Reasons for the Adjustment

Libya plans to ramp up crude production to 1 million b/d (MMB/D) in four weeks following the September United Nations-backed ceasefire in the country. The recently peace agreement lifted an eight-month blockade by the Libyan National Army on most crude exports.

Libya National Oil Corp. confirmed in reports last week that production would rise to 800,000 b/d in two weeks and to about 1 MMB/D in four weeks. As of October 20, Libyan production had risen to more than 500,000 b/d according to S&P Global Platts. Libya produced about 1.6 MMB/D of crude in normal situation.

Some analysts see the rapid rising of Libyan barrels to be an issue to the OPEC+ group as it could disrupt its quest to balance the oil market. Libya’s additional crude could change the story back to oversupply concerns as crude demand outlook weakens, as the world continues on restrictive measures and lockdowns to contain COVID-19.

OPEC+ tapered production cut to 7.8 MMB/D from 9.7 MMB/D in August, and is scheduled to roll back further to 5.8 MMB/D starting in January. However, with a second wave of coronavirus infections weighing on the oil market’s outlook, many OPEC+ ministers are expected to keep the current cuts in place.
Asian demand for Middle East crude was noted to have been recently increasing in view of higher demand by key importers-China and India for the December-loading cycle. Improved refining margins in October also helped boosted demand.
The Asian gasoline market ended the week on a soft note amid lackluster demand and greater supply, with more cargo offerings from India. Platts expect regional gasoline supply in an upturn as runs begin to climb in November after the maintenance.

The Asian gasoil/diesel market ended the week also on a soft note with oil industry sources reiterating that low demand and good supplies were still weighing on the market complex. Refinery runs are set to begin rising in November following the conclusion of October maintenance works. Platts however noted that healthy outflows of gasoil from Singapore to Australia, Malaysia and Myanmar were recorded in the past week.

FOREX: Philippine peso depreciated week-on-week against the US dollar by P0.02 to P48.58 from P48.56 in previous week.

DOMESTIC OIL PRICES

The oil companies implemented their price adjustments effective today, 27 October 2020. Diesel and kerosene have decreased; diesel by P0.25 per liter and kerosene by P0.15 per liter. No price movement has been effected on the price of gasoline.

These resulted to the total year-to-date adjustments to stand at a net decrease of P4.67/liter for gasoline, P10.26/liter for diesel and P13.59/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

Posted on: September 16, 2020 by pip_admin

WORLD OIL PRICES (September 7- 11, 2020 trading days)

Dubai crude has decreased week-on-week by about US$4.50/bbl. Both MOPS gasoline and MOPS diesel have also decreased: gasoline by around US$3.35 per barrel and diesel by nearly US$ 5.00 per barrel.

Reasons for the Adjustment

The US Energy Information Administration (EIA) stated in its monthly Short-Term Energy Outlook released this week that global oil demand grew by 1 million b/d (MMB/D) in August, the slowest month-on-month increase since demand started recovering from coronavirus lockdowns in May. Last month (August) global supply growth surpassed demand growth, the first time during the recovery period.
The EIA cut its outlook for 2021 global oil demand growth by 500,000 b/d from last previous month forecast to 6.5 MMB/D on lower expected consumption growth in China. EIA now sees China demand growing 1 MMB/D next year, down from 1.5 MMB/D in last month’s forecast.
Reportedly, OPEC 13 members produced 24.37 MMBD in August (a 4% rise from July) while its nine partners, including Russia, added 12.67 MMB/D (a 6% increase). The higher output was expected as the OPEC+ coalition had been scheduled to ease output to 7.7 MMB/D (from 9.7 MMB/D in June and July) for the rest of the year starting in August. The group achieved 97% compliance with its new quotas in the month, according to Platts calculations.
However, OPEC’s increased production is coming at a time when the rapid recovery of global oil demand appears to be stalling, amid fears of a growing second wave of COVID-19 infections. Thus, Crude oil markets have softened markedly over the past week, with Dated Brent falling below $40/b for the first time since mid-June. In the sour crude market, Dubai times-spreads had been on an upward trend for the second half of August but have seen a sharp reversal over the past two weeks. The Dubai M1/M3 time-spread was at minus 73 cents/b on September 10.
Asian gasoline weakens during the week (Sep 4-11) as supply concerns return, dragging on fundamentals of Asian gasoline time-spreads that slipped deeper into contango later in the week. However, Singapore gasoline cracks (crude vs. gasoline) are now above gasoil/diesel for the first time since 2017 and could see additional support with refinery maintenance set to rise heading into October, in addition to extended accident-related outages such as Taiwan’s Formosa and Malaysia’s Pengerang.
The slump in Asian gasoil/diesel markets bottomed out, but with little sign of any recovery developing. The Singapore gasoil vs. Dubai crack was stable at $3.00/b, up moderately from last week lows. Market sentiment remains unpromising on a slowing demand recovery, high stock levels, and expectations of continued heavy exports from China though the rest of the year.
Singapore middle distillate stocks fell by 6% week-on-week to 15.05 million barrels. But despite the drop, Platts noted that stock levels remain high by historical standards, as this week’s total is the second-highest since September 2016.
A lack of European demand for gasoil will see more Middle Eastern and Indian volumes heading east to Southeast Asia, adding to the pressure on Singapore prices. With US Gulf Coast low sulfur gasoil stock at record highs and 66% higher year on year, it is difficult to see additional gasoil from the East of Suez moving to Europe even as the winter season approaches.1

1 Platts’ Asia Pacific Weekly Recap, 11 September 2020

FOREX: Philippine peso depreciated week-on-week against the US dollar by P0.05 to P48.60 from P48.55 in previous week.

DOMESTIC OIL PRICES

The oil companies implemented their price adjustments effective today, 15 September 2020. Gasoline has decreased of P1.00 per liter, diesel by P1.50-P1.55 per liter and kerosene by P1.45 per liter.

These resulted to the total year-to-date adjustments to stand at a net decrease of P5.22/liter for gasoline, P10.99/liter for diesel and P15.39/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