Oil Monitor as of 25 May 2021

Date published: May 25, 2021

WORLD OIL PRICES (May 17-21, 2021 trading days)

Dubai crude has decreased week-on-week by around US$0.05/bbl. MOPS gasoline has also decreased by almost US$0.55 per barrel. On the contrary, MOPS diesel has increased by nearly US$0.35 per barrel.

Reasons for the Adjustment

  • The world oil market is fairly balanced at present with demand slightly exceeding supply according to Russia Deputy Prime Minister Alexander Novak.
    • “If a deficit occurs, OPEC+ could always decide to pump more”, stressed the top oil policy negotiator of Russia.
    • Russia and OPEC+ are ramping up its oil production between May and July, as per the group’s agreement in April, to gradually return over 1 million bpd (MMB/D) to the market between May and July.
  • Meanwhile, healthy demand for crude from Japan and China reportedly continued to support sentiment in the Middle East crude oil market.
    • The uptick in Chinese domestic demand is due to the levy on product imports.
    • Likewise, the upcoming summer demand in Japan continues to offset the growing pandemic concerns in the country.
       
  • The US and Iran seem poised to seal a new nuclear agreement that will pave the way for sanctions relief and increased oil exports from Iran.
    • With sanctions relief, Iran’s exports is estimated to rise to around 1.5 MMB/D by year-end. Refiners in China, India, South Korea, and Europe could then resume purchases of Iranian oil that have been suspended since late-2018.
    • Analysts however believe that when sanctions are finally lifted and more oil supplies come to the market, oil prices may not push down as there is a feeling that the oil market might already be undersupplied.
      • The market might be undersupplied because of signs of rising global demand ahead of the traditionally high demand for gasoline during the summer months, and;
      • The fact that OPEC+ is still withholding huge supplies.
  • For gasoline, the Asian market sentiment weakened at the end of the week, as the Singapore 92 RON gasoline crack dwindled following a softening of the US GasolineBrent crack.
    • Asia's gasoline market has also been seeing soft demand from Southeast Asia, especially in Malaysia and Vietnam, where the COVID-19 outbreak has worsened. But Indonesia is holding up, as the country is expected to maintain steady gasoline imports in June, totalling between 8-9 MMB/D.
  • For the gasoil/diesel market, leaner supplies continued to provide upward support for the Asian gasoil market during the week.
    • The leaner stockpile was reportedly due to tighter supply balances owing to ongoing turnarounds, which have trimmed regional middle distillate production volumes.

 

FOREX: Philippine peso depreciated week-on-week against the US dollar by P0.3 to P47.87 from P47.84 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 25 May 2021, the oil companies implemented the price adjustment in domestic oil products. Gasoline and diesel have increased; gasoline by P0.15 per liter and P0.25 per liter for diesel. On the opposite, kerosene has decreased by P0.15 per liter.

These resulted to the year-to-date adjustments to stand at total net increase of P8.50/liter for gasoline, P7.20/liter for diesel and P5.85/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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