Oil Monitor as of 31 May 2022

Date published: June 1, 2022

WORLD OIL PRICES (May 23-27,2022 trading days)

The price of Dubai crude has risen by roughly $1.00/bbl week-on-week. MOPS diesel prices rose as well by approximately $3.30 per barrel, while MOPS gasoline prices declined by around $5.00 per barrel.

Reasons for the Price Adjustment1

  • Crude prices slid in the previous week due to bearish Chinese demand data and reports of EU shying away from full Russian embargo, but then started rising this week after supply tightness persists amid low stocks and as China prepares to end the lockdowns as planned on June 1.

o US commercial crude stocks declined by 1.02 million barrels to 419.8 million barrels in the week to May 20, as per EIA data. The prices were still fanned by a looming threat of EU’s ban on Russian oil that may further pose supply tightness even when there are oppositions to the proposal from member countries like Hungary.

o China reported new COVID-19 infections on May 23 with majority in Shanghai, where authorities have begun gradually easing restrictions. In Beijing, cases doubled from the previous daily average, raising fears of extension of lockdown restrictions.

  • Dubai settled lower on week at $5.20/b on May 26 Asian close, with Dubai markets facing muted activity as the buying for the July cycle is almost over and traders are awaiting fresh cues for August cycle.

o Dubai markets also faced headwinds after China reported high number of cases in Shanghai with the lessening of restrictions. Fears of further increase in cases come to the forefront with the increase in movement, that may again lead to further lockdowns given China’s dynamic zero tolerance policy towards COVID-19.

  • Asian gasoline fell by $2.49/b on week and settled at $33.53/b on May 26 Asian close, after rising for the previous few weeks, as market participants considered an increase in Chinese exports. Chinese government is expected to grant new quotas of up to 3.5 million mt to relieve the country's inventory pressure amid low domestic demand.

o The softening of gasoline market was further fueled by reports that US government is considering loosening restrictions on cheaper blending materials like butane, potentially lowering the cost of gasoline.2

  • The Asian gasoil/diesel market rose on week by $7.12/b to $42.31/b as demand from importing regions in Asia is healthy as COVID-19 restrictions have been lifted in most countries and a pick-up in industrial, tourist and economic activities. The market rally was supported from reports of a potential ban on US oil product exports, which if implemented, may tighten supply in the global market, lending support to the Asian gasoil complex.
  • Reports of a prospective ban on US oil product exports fueled the market surge, which, if enforced, may limit supplies in the worldwide market, boosting the Asian gasoil complex.

FOREX: Philippine peso appreciated week-on-week against the US dollar by P0.08 to P52.32 from P52.40 in previous week.

DOMESTIC OIL PRICES

Effective 31 May 2022, the oil companies implemented a price decrease in gasoline by P1.70 per liter contrary to diesel and kerosene that increased by P1.20 and P2.45 per liter, respectively.

These resulted to the year-to-date adjustments to stand at a net increase of P23.85/liter for gasoline, P30.30/liter for diesel and P27.65/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.

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 Butane is a cheaper blending component than most of the other ingredients. That makes fall and winter gasoline cheaper to produce. (https://eprinc.org/2009/06/a-primer-on-gasoline-blending/#sthash.p0EwLGw6.dpbs)

 

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