Oil Monitor as of 7 December 2021

Date published: December 8, 2021

WORLD OIL PRICES (November 29-December 03,2021 trading days)

Dubai crude has decreased week-on-week by about US$7.90/bbl. Both MOPS gasoline and MOPS diesel have also decreased by around US$ 7.50 per barrel.

Reasons for the Price Adjustment1

  • Crude oil prices plunged as omicron variant fears gripped the market and clouded the near-term demand fundamentals. The “variant of concern” is likely to have higher transmissibility due to higher number of mutations. Per the World Health Organization, the existing vaccines are likely to be effective against the new Covid strain but they still need time to study the nature of the virus.
  • With the new covid variant, some countries have re-instituted flight bans while others deferred quarantine free travel arrangements and re-introduced stricter testing and border control measures further accelerating the slide.
  • Crude prices are seen to be under pressure with the oil market turning into surplus in early 2022 coupled with omicron variant fueling the short-term demand concerns, and the OPEC+ agreed increase of 400,000 b/d that would take effect in January 2022.
  • Higher exports from China and rising infections in Europe brought the Asian gasoline market into bearish sentiment behind the emergence of omicron variant. This was also supported by the rising US gasoline stocks by 4.03 million barrels in the week ending Nov. 26. Some support though came from Indonesia and Kuwait seeking spot gasoline cargoes for near-term delivery.
  • Asian gasoil/diesel market remained subdued on prospects on higher supply in the Asian region. More swing barrels from India and Persian Gulf are expected to land into Asia due to shrinking East-West arbitrage. Singapore-Rotterdam EFS remained less than minus $15/b signaling difficulty in shipping barrels to Europe thereby increasing supply in the region.
  • Domestic market in China is reported short of gasoil barrels but year-end destocking by refiners could likely push some barrels into Asia and weigh further on fundamentals

FOREX: Philippine peso appreciated week-on-week against the US dollar by P0.16 to P50.39 from P50.56 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 07 December 2021, the oil companies implemented a price decrease in domestic oil products. Gasoline has decreased by P2.40 per liter as well as diesel by P2.65 per liter and kerosene by P2.70 per liter.

These resulted to the year-to-date adjustments to stand at a total net increase of P15.70/liter for gasoline, P13.05/liter for diesel and P10.49/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

 

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