WORLD OIL PRICES (September 20-24, 2021 trading days)

Dubai crude has increased week-on-week by almost US$1.00/bbl. MOPS gasoline and MOPS diesel have also increased by almost US$1.15 per barrel and US$ 1.85 per barrel, respectively.

Reasons for the Price Adjustment¹

• Crude oil prices moved higher on prolonged supply concerns as the US Gulf Coast oil output remains constrained amid tightness in European gas market that is lending increasing support for gas to oil switching. Around 16.18% or about 294.21b/d of Gulf’s oil production remains offline as of Sept. 23.

o Additionally, the damage caused by hurricane Ida to a key oil transfer facility that links three offshore facilities in Gulf of Mexico to coast is likely to remain offline for the rest of 2021.

o Moreover, tightening supply amid crude inventories drawdown and improving demand fundamentals and weaker US dollar further pushed prices higher towards later part of last week. Crude inventories declined for second week in a row and fell by 6.1 million barrels for the week ending Sept. 24, while Washington’s announcement on re-opening of borders to fully vaccinated travelers from 33 countries added to positive demand outlook.

• ​​​​Asian gasoline market got its support from steady gasoline demand recovery in India, where mobility index reportedly increased by about thirty percent in September, up from lows in lateMay to early-June. However, concerns remain over increasing infections and tightening of local restrictions in China, and in Vietnam where spike in infections prompted the authorities to extend the lockdown measures in Ho Chi Ming city until end of September.

o Rising cases raised concerns over the gasoline demand outlook ahead of the upcoming Golden week holiday in China in October.

• Meanwhile, the build-up of US gasoline inventories added to bearish market sentiment as US stocks rose by 3.47 million barrels to 221.62 million barrels for the week ending Sept. 17 as reflected by moderate demand sentiment.

• On Asian gasoil/diesel market, less export volumes from China, Japan and Taiwan were seen in October amid viable arbitrage economics to send barrels to the West drove Asian gasoil/diesel 10 ppm higher, with cracks rising by $0.87/b on week to $10.75/b on Sept. 23 Asian close.

o Exports from China have remained tepid and expected to fall in October while the swing barrels from India and Persian Gulf are heading to the West with East-West gasoil/diesel arbitrage staying at viable levels of minus $13-14/b.

• Meanwhile, on the demand-side of gasoil/diesel market, in addition to improving economic activity in South and Southeast Asia and lifting of seasonal fishing ban in South China sea, demand from Australia, region’s biggest gasoil buyer, is expected to improve as vaccination rates continue to climb higher.

o On back of bullish demand and tight supply, front month time spread for Singapore gasoil cargo hit a record of $0.57/b on Sept. 23 Asian close. The last high was seen at $0.61/b on 17 June 2020.

FOREX: Philippine peso depreciated week-on-week against the US dollar by P0.33 to P50.25 from P49.92 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 28 September 2021, the oil companies implemented a price increase in domestic oil products, i.e. P0.55 per liter for gasoline, P0.90 per liter for diesel and P0.95 per liter for kerosene.

These resulted to the year-to-date adjustments to stand at a total net increase of P15.10/liter for gasoline, P12.95/liter for diesel and P10.65/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.

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