WORLD OIL PRICES (February 28-March 04, 2022 trading days)

Dubai crude has increased week-on-week by around US$ 11.00/bbl. MOPS gasoline and MOPS diesel have both increased by almost US$10.00 per barrel and about US$ 14.70 per barrel.

Reasons for the Price Adjustment¹

• Crude oil complex continued the strong uptrend from last week as Russia-Ukraine geopolitical dcrisis continues to evolve. Even though the international sanctions have largely targeted the Russia’s financial system, crude buyers are avoiding Russian barrels as there is a growing anticipation among market players that sanctions could be expanded to energy sector soon.

o On March 2, United Kingdom (UK) banned all Russian-owned oil tankers from docking at British ports and earlier Canada blocked all oil imports from Russia. Amid this growing fear of sanctions and heightened geopolitical risks, crude buyers continue to avoid Russian oil even as sellers offer deep discount to clear the excess barrels.

o Oil prices are anticipated to remain high as global oil supply continues to decline while demand remains strong, with prices only beginning to fall if demand destruction becomes apparent or Iranian production returns quickly.

• Asian gasoline cracks trended lower, taking hints from the weakness in US RBOB-gasoline futures declining by $1.77/b on week to $13.92/b on Mar. 3 Asian close. However, the near-term sentiment remains strong with regional economies further easing up restrictions. India has removed most of the restrictions with Philippines lowering the alert level to one, the lowest level, in the capital city of Manila. Meanwhile, Indonesia and Malaysia were seen stockpiling gasoline cargoes ahead of higher driving Ramadan season.

o With the reopening of borders and the relaxation of travel restrictions, mobility indicators in Australia and Japan have also improved. On the supply side, given China's higher domestic prices and reduced product export quotas, there is less incentive to export. However, off late the export margins have risen sharply, and this could potentially incentivize some of the refiners to push more barrels into the export market and alleviate some of the supply tightness.

• Asian gasoil/diesel complex drew robust support from the West amid on-going Russia-Ukraine military conflict. Russian gasoil/ULSD exports account for about 50% European gasoil imports. With buyers staying away from Russian barrels, which accounted for majority of the European gasoil volumes. The supply constraint in the West worsened as purchasers shied away from Russian barrels, which accounted for the majority of European gasoil volumes, resulting in an abnormally large opening of the arbitrage from the East.

FOREX: Philippine peso depreciated week-on-week against the US dollar by P0.09 to P51.44 from P51.35 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

Effective 08 March 2022, the oil companies implemented a price increase in domestic oil products. Gasoline has increased by P3.60 per liter, diesel by P5.85 per liter, while kerosene by P4.10 per liter.

These resulted to the year-to-date adjustments to stand at a total net increase of P13.25/liter for gasoline, P17.50/liter for diesel and P11.40/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

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¹ Asia Pacific Weekly Recap by S & P Global Platts Analytics