Oil Monitor as of 13 April 2021

Date published: April 13, 2021

WORLD OIL PRICES (April 5-9, 2021 trading days)

Dubai crude has decreased week-on-week by about US$1.70/bbl. Both MOPS gasoline and MOPS diesel have also decreased by around US$1.15 per barrel.

Reasons for the Adjustment

  • The OPEC+ meeting on April 1 meeting decided to add back 350,000 b/d in May, another 350,000 b/d in June, and 441,000 in July. Saudi Arabia also said it will unwind its voluntary 1 million b/d in extra cuts by 250,000 b/d in May; 350,000 b/d in June and 400,000 b/d in July, S&P Global Platts reported.
    • The group’s decision to increase production into peak US driving season reportedly signalled a decisive vote of confidence to the US vaccine rollout and the catch-up expectations in some of the harder hit economies in the world.​
    • A few analysts said the easing of production cuts have helped allay traders1 concerns that a lot more barrels could have come back to the markets.
    • Goldman Sachs analysts however expect global inventories to still normalize by fall 2021 despite the OPEC+ ramp-up.
       
  • More supply is expected this year as Iran seeks sanction relief. Iran wants the removal of Trump-imposed sanctions, which include curbing Iran's oil supply to global markets and cutting its access to petrodollars.​
    • Iranian crude production has risen in recent months, hitting 2.14 million b/d (MMB/D) in February, according to the latest S&P Global Platts survey of OPEC output, an increase from a 33-year low of 1.95 MMB/D in August. Much of that rise has come from higher volumes to China, buoyed further by climbing oil prices in 2021.
  • On demand, arbitrage crude from the West continues to find unwavering support from Indian refiners. The country's largest refiner, Indian Oil Corp., was heard to have bought 8 million barrels of June-loading West African crudes.
    • Despite stringent lockdowns in place resulting from a lethal second wave of the Covid-19 pandemic, India continues to seek more crude aided by enticing freight levels.​
    • Additionally, renewed lockdowns in certain European and Western countries could further push more crudes to Asia, traders said.
  • Crude oil prices turned lower on news that OPEC+ production increased by 450,000 b/d in March, with Russia and Iraq pumping well above their agreed caps. Quota-exempt members Iran and Libya also boosted output, according to the latest S&P Global Platts survey.
  • For gasoline, the product reportedly remains bullish on refinery outages and robust regional demand.
    • Platts report disclosed the fire outage at Pertamina’s Balongan refinery (125,000 b/d) on March 29 pushed substantial increase in the price of gasoline vis-à-vis crude.
    • Fresh spot demand from Indonesia, Vietnam, Sri Lanka, and Egypt also helped support gasoline sentiment amid supply build-up.
    • Enterprise Singapore data showed that inventories of light distillates in Singapore (Southeast Asia's largest oil trading hub) recorded a 2.41% on week increase to total 14.594 million barrels in the week ended April 7.
      • The build-up in total inventories came as imports of gasoline from North Asia jumped, led by cargoes from China that made up of 71.74% of all total gasoline inflows into Singapore over the April 1-7 period.
         
  • Gasoil showed signs of turning a corner after weeks of steady decline. Import demand from Indonesia and Australia is expected to rise due to the recent fire incident at Pertamina’s Balongan (125,000 b/d) and the permanent closure of BP Kwinana (140,000 b/d) last month, respectively.
    • Newbuild VLCC movements continue to accommodate arbitrage of gasoil to Europe, even as normal economics remain unfavourable.
    • Notably, European refinery runs are set to dip substantially lower in April due to maintenance and run cuts - 500,000 b/d below April 2020 and 2.2 MMB/D below April 2019.
  • In Asia, run rates remain largely depressed outside of China and India.
 
FOREX: Philippine peso depreciated week-on-week against the US dollar by P0.08 to P48.57 from P48.50 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 April 2021, the oil companies implemented the price decrease in domestic oil products. Gasoline has decreased by P0.25 per liter along with the rollback in kerosene by P0.10 per liter. . There was no movement effected on the price of diesel.

These resulted to the year-to-date adjustments to stand at total net increase of P6.55/liter for gasoline and P3.45/liter for kerosene. Diesel remains at a net increase of P4.65/liter.

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 Source: Platts news, Asia Pacific Weekly Recap dated 09 April 2021, PIRA World Oil Market Forecast- 29 March 2021

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