WORLD OIL PRICES (June 28-July 2, 2021 trading days)

Dubai crude has increased week-on-week by around US$0.55/bbl. MOPS gasoline has also increased by almost US$1.20 per barrel. On the opposite, MOPS diesel has a minimal decreased of US$ 0.04 per barrel.

Reasons for the Price Adjustment

• Crude oil futures dipped early July 2 after the OPEC+ group delayed a ministerial meeting and seemed deadlocked on a potentially bullish deal for oil prices that would reduce the member countries' production hikes below market expectations through the end of 2021.

o The decline in crude prices came just one day after front-month NYMEX WTI settled above $75/b for the first time since October 2018 on optimism of the possible OPEC+ deal. Rystad Energy oil markets analyst said the oil futures were down a little because traders were waiting to see the results of the extended OPEC+ meeting.

o The gains of the previous day reversed when the UAE appeared to block the deal, demanding a higher production quota to match the lenience been given to Russia and Iraq. Negotiations will be difficult as OPEC+ knows that if the UAE is allowed to produce from a different base, other members may protest, market analysts noted.

o The newly formed Hurricane Elsa in the Atlantic Ocean is another factor that pushed prices higher, though minimal impact is projected to offshore oil production in the Gulf of Mexico. Hurricane Elsa is seen to weaken into a tropical storm over Cuba and heading to Florida on July 6 without picking up much more additional strength.

• The Asian gasoline market was poised for a new milestone at the start of the new trading month, with crack spreads hitting 18-month high levels in early July 1 trading as focus stayed on tightening gasoline supply from China.

o The uptick continued on the bullish momentum brought about by news that Chinese oil companies were likely to slash their July gasoline gasoil and jet fuel exports plan to a six-year low of 1.15 million mt amid tight export quota availability and better domestic margin, Platts reported previously.

o COVID-related issues continue to loom over the region's demand outlook. Indonesia has tightened COVID restrictions covering Java and Bali amid a spike in daily cases to record levels have recently been placed in lockdown due to the growth of the Delta COVID variant.

• Steady fundamentals for the Asian ultra-low sulfur gasoil/diesel market saw the complex moving within a narrow range July 1, with traders saying that participants remained on watch for fresh pricing cues.

o The slow decline is more due to COVID-19 sentiment as regional lockdowns have been taking place, even in Australia. With some pockets of spot demand emerged on July 1, which have provided some relief to the moribund gasoil market.

o Some traders said steady African demand for gasoil has helped to lend a measure of support to the gasoil complex. The Persian Gulf and India are the main sources of gasoil supply to Africa, with some barrels occasionally flowing from Singapore or North Asia, Platts noted.

o Tightening Chinese exports and increased demand from Australia following refinery closures should prevent a further collapse for gasoil, but recovery prospects remain mixed.

FOREX: Philippine peso depreciated week-on-week against the US dollar by P0.10 to P48.80 from P48.71 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 06 July 2021, the oil companies implemented price adjustments in domestic oil products. Gasoline has increased by P0.50-P0.60 per liter and P0.10 per liter for diesel. On the contrary, kerosene has decreased by P0.05 per liter.

These resulted to the year-to-date adjustments to stand at a total net increase of P12.35/liter for gasoline, P10.00/liter for diesel and P8.35/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