Oil Monitor as of 15 June 2021

Date published: June 16, 2021

WORLD OIL PRICES (June 7-11, 2021 trading days)

Dubai crude has increased week-on-week by almost US$1.20/bbl. MOPS gasoline and diesel have also increased by around US$1.60 and US$1.20 per barrel, respectively.

Reasons for the Adjustment

  • Oil prices continued their rally for the third week in a row, amid confidence in the strong oil demand outlook and accelerating vaccinations allowing people to travel more. On the week closing, Brent crude rose to $72.69 per barrel. West Texas Intermediate (WTI) rose to $70.91 per barrel.
    • International benchmarks’ futures forward curves are further tightening, and the Arabian Gulf Dubai benchmark is trading at its steepest backwardation market structure for almost a year, which indicates supply tightness.
  • In the International Energy Agency’s (IEA) monthly oil market report, global oil demand is set to rise by 3.1 million b/d (MMB/D) in 2022, returning to pre- pandemic levels by the fourth quarter, warning that a "chasm1" is set to open between supply and demand in the second half of this year.
    • It also forecast that oil output by countries outside the OPEC+ production pact would rise by 1.6 MMB/D next year, hitting pre- pandemic levels mid-year, led by the US, and also supported by Brazil 2 and Norway3.
  • On the other hand, in OPEC’s monthly oil market report, global economy is seen to accelerate in the second half of 2021. The producer bloc kept its forecast of oil demand growth unchanged in its latest market analysis at 96.58 MMB/D in 2021, up 5.95 MMB/D from 2020 when the demand estimate was revised up to 90.63 MMB/D
    • The OPEC+ alliance is scheduled to meet online July 1 to assess market conditions and review plans to bring more output online.
  • The Asian gasoline market continued to strengthen at the end of the trading week amid the supply-side support.
    • India’s (Gujarat) Reliance Industries Ltd., the world's biggest refinery complex, confirmed that the FCC unit at 704,000 b/d export-oriented refinery was brought offline after an emergency shutdown on June 6.
    • The outage was already causing gasoline tightness in the region. The company said that some product shipments may get delayed.
  • On gasoil/diesel, regional spot barrels were heading at higher price levels over the uncertainty on the extent of supply tightness in the ultra-low sulfur diesel complex.
    •  While market participants noted that the Asian gasoil market continues to maintain a firm footing, several observers reiterated that regional demand, especially in Southeast Asia, is still weak, dented by the recent new waves of COVID-19 infections.
    • Moreover, the 10 ppm sulfur diesel market in Asia closed the week on a steady note as participants reevaluate supply-demand fundamentals for fresh pricing cues.
      • On the supply front, South Korean refiner GS Caltex was seen to emerge to the spot trading scene for the second time this month. The company is offering to supply two cargoes of 10 ppm sulfur gasoil.

FOREX: Philippine peso appreciated week-on-week against the US dollar by P0.05 to P47.71 from P47.76 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 15 June 2021, the oil companies implemented a price increase in domestic oil products. Gasoline has increased by P0.50 per liter, diesel by P0.40 per liter and P0.30 per liter for kerosene.

These resulted to the year-to-date adjustments to stand at a total net increase of P10.00/liter for gasoline, P8.55/liter for diesel and P7.00/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

_______
1 A sudden interruption of continuity; a gap.
2 Brazil is the world’s ninth-largest economy and the United States is Brazil’s second-largest trading partner.
3 The United States and Norway have a dynamic economic partnership that is creating jobs, driving the development of safe and secure energy sources, and fostering innovation.

Pages