WORLD OIL PRICES (July 5-9, 2021 trading days)
MOPS gasoline and MOPS diesel have increased by almost US$1.90 per barrel and US$0.25 per barrel, respectively. There was no movement on Dubai Crude for this trading days.
Reasons for the Price Adjustment
- Crude oil futures settled higher July 9 on the back of tightened near term supply outlooks, but longer-term supply uncertainty and increasing pandemic-fueled demand concerns kept price below recent highs.
o A rapid drawdown in US crude inventories in recent weeks has supported bullish near-term supply outlooks.
o The inventory data from the US Department of Energy yesterday alleviated concerns for the time being about a dispute within the producer alliance OPEC+ and about a weakening of demand.
o Meanwhile the rapid spread of the coronavirus Delta variant has stoked concerns that a resurgent COVID-19 pandemic could slow bullish demand growth expectations.
- "The delta virus is a fast-spreading virus and despite the rapid rollout of vaccines in the pockets where it's been able to spread it's done so quickly and this is weakening demand and growth expectations into the autumn," Saxo Banks Head of commodity strategy Ole Hansen said.
- On July 7 the US Centers for Disease Control and Prevention announced that the highly contagious Delta variant comprised more than 51% of all US COVID-19 cases and was now the dominant strain in the country.
- The Asian gasoline market received a new jolt of support at the end of the trading week July 9, as an unexpected sharp drawdown in US gasoline inventories put the Asian gasoline paper crack spreads on track to hit a near three-year high.
o According to US Energy Information Administration data released late-July 8, US gasoline inventories fell 6.08 million barrels during the week that ended July 2 to 235.5 million barrels, sharply higher than 2.74 million barrels draw forecasted by American Petroleum Institute and the 1.7 million draw that analysts surveyed by Platts had anticipated.
o As Asian gasoline crack spreads typically taking directional cues from the US RBOB-Brent crack, the derivative front month FOB Singapore 92 RON gasoline crack against Brent swap in early July 9 trading was pegged between the levels of around $8.85/b and $8.95/b, having jumped 6.97% from the previous trading session.
o US gasoline stocks drew more than 6 million barrels in the week-ended July 2, as implied demand surged to over 10 million b/d (an all-time high), US Energy Information Administration data showed July 8. Gasoline stocks are now at 235.5 million barrels, at the low end of the range of the past several years with days cover also continuing to normalize. Expecting demand to pull back next week as downstream marketers work off their inventories. We are calling for demand for the week ending July 9 to average 9.38 million b/d.
- Asian gasoil/diesel markets remained largely stable July 9, reflecting a persistently mixed outlook amid thin trade activity that has resulted in the complex largely shuffling sideways over the past week.
o Some industry sources said that while the medium and heavy sulfur gasoil grades have stabilized, with cash premiums moving in a narrow range, the ultra low sulfur diesel grade seemed to be under slightly more downward pressure.
o A few traders said the decline, which came even as Singapore 10 ppm sulfur gasoil derivative time spreads remained in a shallow contango1 to backwarded2 structure, could be due to more supplies being pushed out of other countries due to poor domestic demand amid coronavirus-related lockdowns and movement restrictions.
o In addition, several regional spot demand has been removed from the market as the Philippines' Bataan refinery restarts operations following a five-month shutdown.
FOREX: Philippine peso depreciated week-on-week against the US dollar by P0. 87 to P49.68 from P48.80 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 13 July 2021, the oil companies implemented a price increase in domestic oil products. Gasoline has increased by P1.15 per liter, P0.60 per liter for diesel and P0.65 per liter for kerosene.
These resulted to the year-to-date adjustments to stand at a total net increase of P13.50/liter for gasoline, P10.60/liter for diesel and P9.00/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 Contango is a market situation where prices are higher for forward delivery dates than for nearer delivery dates.
2 Backwardation is when the current price of an underlying asset i s higher than prices trading in the futures market.