WORLD OIL PRICES (September 5-9, 2022 trading days)
The week-on-week price of Dubai crude has decreased by almost $5.70/bbl. MOPS gasoline has also decreased by nearly $3.00 per barrel as well as MOPS diesel and kerosene by around $5.50 per barrel and $6.40 per barrel, respectively.
Reasons for the Price Adjustment1
- Crude prices extended losses in the latest week as demand worries spurred by hawkish monetary tightening signals from the European Central Bank and the US Federal Reserve as well as China’s intensified COVID-19 controls that have largely outweighed a symbolic OPEC+ production cut.
o The European Central Bank (ECB) raised interest rates by an unprecedented 75 basis points on September 08 to rein in inflation even as recession fears were growing in Europe amid weakening economic indicators and a looming energy crisis after Russia indefinitely halted natural gas flows via the key Nord Stream 1 pipeline.
o Concurrently, Fed chief Jerome Powell declared that the US central bank won’t flinch in its efforts to curb inflation “until the job is done,” signaling another 75-basis-point rate hike is possible at the next Federal Open Market Committee meeting Sept. 20-21. Aggressive rate hikes are typically viewed as bearish for crude demand as they are aimed at cooling off economic growth.
o On supply, the OPEC+ agreed on September 5 to reduce output by 100,000 b/d for October, its first cut in 22 months. The amount of the reduction, roughly 0.1% of global demand, is observed to unlikely cause a meaningful impact on the supply/demand dynamics.
- Asian gasoline was generally lower during the week despite market expectation of tightening supply. Asian refiners were reported to have lowered their gasoline yield in addition to a few scheduled Q3 maintenances in South Korea, India and Japan.
o Gasoline stocks tightened in major global hubs except the US.
o Singapore's commercial stockpile of light distillates, including gasoline and naphtha, fell by 4.1% on week to 15.66 million barrels in the week ended September 7, Enterprise Singapore data showed.
- On gasoline demand, key regional importer Indonesia is expected to trend down demand following a surge in local fuel prices; while Indian state refiners move to import gasoline cargoes due to planned maintenances.
- Asian gasoil/diesel was also lower during the week as monsoon rain capped South Asia’s diesel demand this month. Product’s cracks however rose as the week ended amid tight global inventories and as regional production trend lower amid Q3 maintenances.
o Gasoline stocks tightened in major global hubs except the US.
o Singapore's commercial stockpile of light distillates, including gasoline and naphtha, fell by 4.1% on week to 15.66 million barrels in the week ended September 7, Enterprise Singapore data showed.
- On gasoline demand, key regional importer Indonesia is expected to trend down demand following a surge in local fuel prices; while Indian state refiners move to import gasoline cargoes due to planned maintenances.
- Asian gasoil/diesel was also lower during the week as monsoon rain capped South Asia’s diesel demand this month. Product’s cracks however rose as the week ended amid tight global inventories and as regional production trend lower amid Q3 maintenances.
FOREX: Philippine peso depreciated week-on-week against the US dollar by P0.64 to P57.03 from P56.39 in previous week.
DOMESTIC OIL PRICES
Effective 13 September 2022, the oil companies implemented a per liter decrease in gasoline by P0.45, diesel by P1.45 and P1.70 for kerosene.
These resulted to the year-to-date total adjustments to stand at a net increase of P16.50/liter for gasoline, P34.80/liter for diesel and P29.90/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.
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
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