WORLD OIL PRICES (March 29-April 02, 2021 trading days)
Dubai crude has increased week-on-week by about US$0.60/bbl. Both MOPS gasoline and MOPS diesel have also increased by around US$2.00 and US$0.25 per barrel, respectively.
Reasons for the Adjustment
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On the 15th ministerial meeting on 01 April 2021, it was agreed that OPEC+1 will raise production by 350,000 b/d in May and June, and 400,000 b/d in July for a cumulative increase of 1.1 million b/d.2
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In parallel, Saudi Arabia will phase out most of its additional cuts by end-July, raising production by 250,000 b/d in May, 350,000 b/d in June and 400,000 b/d in July.
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OPEC+ has chosen a middle course by opting to increase supply but doing so in a staggered manner. It has also removed uncertainty from the market over what is likely to be a period of accelerating demand over the summer.
- Platts Analytics sees global oil demand accelerating by over 7.2 MMB/D over the May-July period led by an accelerating recovery in the US.
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Notwithstanding the OPEC+ decision, Platts Analytics continue to see global balances as conducive to higher prices and stock draws over the next few months.
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The Asian gasoline market was supported on the first trading day of April, with crack spreads hovering near 13-month highs as a US gasoline stock draw continued to fuel optimism in the overall development.
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The sustained strength in Asian gasoline comes as bullish news from the West on late March 31, following data released from the US Energy Information Administration that showed a 1.74 million-barrel stock draw in US gasoline inventories.
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Unplanned regional outages were also fuelling bullish sentiment in Asia.
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Indonesia's 125,000 b/d Balongan refinery was reported to have only extinguished the fires at its facility late March 31, with a total of four of the refinery's 72 storage tanks having been affected by the incident. A total of 100,000 kiloliters of capacity had been lost in the fire that broke out on March 29.
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In Japan, all units at ENEOS Wakayama (127,500 b/d) were shut following a fire incident on March 29. The fire started at a 39,000 b/d fluid catalytic cracker unit (FCC), which could impact gasoline and naphtha output. The fire was extinguished quickly, but there are no details yet for a restart.
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Asian gasoline was also supported by reports that several ships had been placed on subjects to move gasoline out from the Middle East to Western and African destinations.
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On Diesel, the removal of the Suez Canal blockage will relieve some pressure as the flow from India and the Middle East to Europe will now resume.
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However, the incident could have a continued impact as displacements caused by ships delayed or rerouted around the Cape of Good Hope result in higher freight rates and reduced vessel availability through April and May.
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According to Platts data, rates for the West India and Arab Gulf to UK Continent routes are currently at a 10-month high. Higher freight costs make already unfavorable East-West arbitrage economics even less attractive. This, in turn, has resulted in Asian gasoil barrels remaining stuck within the region even as demand plateaued.
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FOREX: Philippine peso appreciated week-on-week against the US dollar by P0.11 to P48.50 from P48.61 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 6 April 2021, the oil companies implemented the price increase in domestic oil products. Gasoline has increased by P0.65 per liter while diesel and kerosene also increased by P0.05 per liter.
These resulted to the year-to-date adjustments to stand at total net increase of P6.80/liter for gasoline, P4.65/liter for diesel and P3.55/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.
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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 OPEC+ is a group of 24 oil-producing nations, made up of the 14 members of the OPEC, and 10 other non-OPEC members, including Russia.
2 The Meeting emphasized the ongoing positive contributions of the Declaration of Cooperation (DoC) in supporting a rebalancing of the global oil market, in line with the historic decisions taken at the 10th (Extraordinary) OPEC and non-OPEC Ministerial Meeting on 12 April 2020 to adjust downwards overall crude oil production, and subsequent decisions.