WORLD OIL PRICES (July 4-8, 2022 trading days)
The week-on-week price of Dubai crude has decreased by about $6.70/bbl. MOPS gasoline and MOPS diesel have also fallen by around $18.00 per barrel and $17.80 per barrel, respectively.
Reasons for the Price Adjustment1
- After rising in the last week on supply issues in Libya and Ecuador coupled with dwindling OPEC+ spare capacity, the crude prices saw a sharp fall in this week amid a wide market sell off on recession fears as the US traders returned after a long weekend.
o Further, adding downward pressure to the prices was crude stock building in the US. Total US commercial crude stocks climbed 8.23 million barrels in the week ended July 1 to 423.8 million barrels as per EIA data which pushed stocks to an eight-week high but still left them 10.4% behind the five-year average for this time of year from 12.7% the week prior.
- Asian Gasoline likewise fell sharply as some of the Asian buyers remained cautious on concerns that the US may head into recession prompting the sell off.
- Despite the weakened oil market over the week, gasoline demand in the Asian region is expected to remain strong in July in view of the following:
o China's National Health Commission, on June 28, reduced the country's quarantine period for international travelers.
o Thailand eased COVID-19-related restrictions as of July 1 and no longer requires incoming vaccinated travelers to apply for a Thailand pass prior to arrival whereas demand for gasoline from Malaysia and Indonesia is expected to increase over Eid al-Adha festivities this weekend.
o Gasoline demand though may be facing headwinds due to high pump prices.
- The Asian gasoil/diesel fell as supply tightness in region eased. Regional refiners maximize gasoil production leading to drawdowns in the inventories. New refining capacity coming online in Asia has also increased the production of gasoil, further adding to supply availabilities.
o Healthy domestic demand due to economic stimulus packages will keep gasoil within China, but relatively attractive margins and adequate quota availability may lead to some gasoil exports from China.
o Demand for gasoil from most countries in the Asia-Pacific region has been growing amid the easing of COVID-19 related restrictions, the monsoon season could present headwinds
by reducing demand from transportation, industrial and construction sectors.
FOREX: Philippine peso depreciated week-on-week against the US dollar by P0.56 to P55.93 from P54.97 in previous week.
DOMESTIC OIL PRICES
Effective 12 July 2022, the oil companies implemented a price decrease in gasoline by P5.70 per liter, diesel by P6.10 per liter and kerosene by P6.30 per liter.
These resulted to the year-to-date adjustments to stand at a net increase of P24.30/liter for gasoline, P36.80/liter for diesel and P30.05/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