Oil Monitor as of 09 August 2022

Date published: August 9, 2022

WORLD OIL PRICES (August 1-5, 2022 trading days)

The week-on-week price of Dubai crude has decreased by almost $6.50/bbl. MOPS gasoline has also decreased by around $5.80 per barrel as well as MOPS diesel and kerosene by nearly $5.50 per barrel and $6.50 per barrel, respectively.

Reasons for the Price Adjustment1

  • Crude prices fell sharply this week amid heightened fears of recession and demand destruction due to fiscal tightening and rising US-China tensions.
     
  • However, crude prices were also range bound amid bullish factors like dwindling OPEC+ spare capacity, supply concerns on Russian gas supply to Europe and bearish factors like interest rate hikes from the US Federal Reserve and rising inflation.
  • Moreover, growing tensions between US and China following US House speaker’s visit to Taiwan could have an impact on supply chains and demand, which could keep the inflationary pressures going strong further, adding downward pressure to crude prices.
  • Asian gasoline cracks2 fell from last week due to demand concerns in some Asian economies on credit and foreign currency issues, and weak gasoline market.

o Myanmar's expected August imports were heard lower amid issues related to foreign credit reserves. Normally, Myanmar imports about 200 KT of gasoline, but it is heard that they are likely to import only about 50 KT in August.

o Moreover, the demand in Pakistan is also likely to trend lower due to high retail prices and they will also likely curb their imports amid ongoing credit issues and forex shortage.

o Vietnam was heard deferring delivery for incoming gasoline cargoes amid low domestic demand.

  • On the supply side, South Korea's gasoline export volumes were heard supported by high refinery run rates in the country that lead to higher exports to Singapore rising 221.95% to 163,320 mt in the week ended Aug. 3. However, South Korea's gasoline export volumes are expected to fall moving forward as run rates will likely drop amid scheduled refinery turnarounds.

  • The downward pressure on the Asian gasoline market was also due to a bearish US gasoline market.

  • The Asian gasoil/diesel crack fell amid easing supply tightness in the near term, as previous record high cracks in June incentivized refineries to tilt yields towards gasoil production. Robust exports from the Northeast Asian region, including Taiwan, South Korea, Japan and China, on the back of relatively strong gasoil cracks, have contributed to the recent decline in Asian gasoil cracks.

FOREX: Philippine peso appreciated week-on-week against the US dollar by P0.21 to P55.49 from P55.70 in previous week.

DOMESTIC OIL PRICES

Effective 9 August 2022, the oil companies implemented a price decrease in gasoline by P2.10 per liter, diesel by P2.20 per liter and kerosene by P2.55 per liter.

These resulted to the year-to-date total adjustments to stand at a net increase of P17.55/liter for gasoline, P30.15/liter for diesel and P24.75/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
2 A crack spread measures the difference between the purchase price of crude oil and the selling price of finished products, such as gasoline and distillate fuel, that a refinery produces from the crude oil

 

 

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