WORLD OIL PRICES (July 12-16, 2021 trading days)
Dubai crude has decreased week-on-week by around US$0.10/bbl. MOPS gasoline and MOPS diesel have also decreased by almost US$0.65 per barrel and US$ 0.10 per barrel, respectively.
Reasons for the Price Adjustment
- Oil prices were little changed on Friday and ended the week lower, sapped in volatile trade by expectations of growing supplies just when a rise in coronavirus cases could lead to lockdown restrictions and depressed demand.
o Brent futures rose 12 cents, or 0.2%, to settle at $73.59 a barrel, while U.S. West Texas Intermediate (WTI) crude rose 16 cents, or 0.2%, to settle at $71.81. Earlier in the volatile session, both benchmarks were down over $1 a barrel.
- OPEC+ meeting on 18 July 2021 ended with no surprises. Fundamentals is anticipated to remain tight in the short-term, but more supply is expected in 2022.
o The OPEC+ meeting concluded after a near three-week hold-up. The UAE, Saudi Arabia and Russia were able to keep the deal in place through a compromise baseline increase, reducing the risk of a broader fallout.
o Production baselines will increase in May 2022 by 1.6 million b/d (500,000 b/d each for Saudi Arabia and Russia, 332,000 b/d for the UAE and 150,000 b/d each for Kuwait and Iraq).
- In July and August, OPEC+ pledges grow by 1.2 million b/d (400,000 b/d of Saudi’s voluntary cut, 440,000 b/d July quota rise and 400,000 b/d August quota rise), below Platts forecast call on OPEC+ growth of 3.5 million b/d.
- Beyond August, quotas will continue to rise in 400,000 b/d increments until the 5.8 million b/d cut is returned. This creates the possibility of more supply through September 2022. However, OPEC+ will re-evaluate this in December 2021, and with the likely return of Iranian and US barrels in 2022, flat quotas in 2022 remain our base case.
- Asian gasoline fundamentals remained relatively strong and largely unchanged during the week. Market participants were cautious amid hints of growing supply in the region which would weigh on overall fundamentals.
o Singapore light distillate stocks, which includes gasoline and blendstocks such as naphtha and reformate, rose to a fresh near four-month high, increasing 2.25% on month to a total of 14.573 million barrels in the week ended July 14 per July 15 Enterprise Singapore data.
o The uptick in light distillate inventories came mainly on the back of rising gasoline imports into Southeast Asia's largest oil trading hub, which rose to its highest in three weeks amid increased inflows from non-Chinese sources.
o The arbitrage economics to move Asian gasoil to the West may however provide an uplift to sentiment to the gasoline market.
- For the gasoil market, fundamentals remained broadly unchanged, with the demand outlook remaining poor, particularly with a step up in movement restrictions in several countries in the region following a resurgence in COVID-19 cases.
- Platts also disclosed that some gasoil/diesel spot demand were removed from the market with restart of the Philippines Bataan refinery operations but it was offset by an improvement in demand from India and weaker supply from China in H2.
FOREX: Philippine peso depreciated week-on-week against the US dollar by P0. 51 to P50.18 from P49.68 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 20 July 2021, the oil companies implemented a price increase in domestic oil products. Gasoline has increased by P0.05-P0.10 per liter, P0.30 per liter for diesel and P0.30 per liter for kerosene.
These resulted to the year-to-date adjustments to stand at a total net increase of P13.60/liter for gasoline, P10.90/liter for diesel and P9.30/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