Oil Monitor as of 23 February 2021

Date published: February 23, 2021

WORLD OIL PRICES (February 15-19, 2021 trading days)

Dubai crude has increased week-on-week by around US$2.00/bbl. Both MOPS gasoline and MOPS diesel have also increased by about US$3.40 and US$2.45 per barrel, respectively.

Reasons for the Adjustment

  • Crude oil futures started the week on an upward trend as a cold snap in the US helped push up prompt demand. NYMEX WTI breached the coveted $60/b mark since last January 2021.
    • Commerzbank analysts said that the physical market appears balanced, with good demand in Asia and a revival of US demand, coupled with continued good production discipline from OPEC+, giving rise to a tight supply situation.
  • Tensions in the Middle East also added to oil's price uplift.
    • Raising fears of fresh Middle East tensions is the interception by the Saudi-led coalition fighting in Yemen of an explosive-laden drone fired by the Iran-aligned Houthi group.
  • Crude futures also found support from the coronavirus vaccine rollouts and continued OPEC+ supply cuts.
    • The progress made in combating the coronavirus pandemic globally contributed to the strong outlook for economic recovery across the broader financial markets, including oil.
    • OPEC and its allies are set to meet March 4 to decide on quotas for April and perhaps beyond.
  • Petroleum products futures settled higher, as frigid temperatures cut into refinery operations and oil production in Texas.
    • There are some concerns that the extreme cold could lead to some supply disruptions at some oil fields in the prolific Permian Bas in creating logistical constraints.
  • The Asian gasoline market has strengthened, with sentiment supported by stronger international crude markers, and a rebound in the US RBOB-Brent crack.
  • Further strengthening the Asian gasoline market are the following:
    • US refinery outages due to cold blankets in the Midwest that underpinned bullishness in the US RBOB complex, which in turn drove Asia gasoline higher.
    • Several refinery shutdowns in Japan following the earthquake that struck near Fukushima are expected to curtail gasoline supply.
  • The Asian gasoil (diesel) market remained shuffling sideways1 amid broadly stable fundamentals. Some market participants say that despite healthy supply volumes seen from China as well as inflows from India and the Persian Gulf, this was being matched by much less production volumes sighted from regional refiners.
    • Some traders have opined that strong export volumes from China over February, coupled with the prospect of healthy inflows of gasoil toward Asia from India and the Persian Gulf. However, other sources said these supplies may not readily able to find homes within the region due to a reduction in output from Asian refiners.
    • S&P Global Platts reported that Philippines' Petron Corporation has taken its 180,000 b/d Bataan refinery in Limay offline and is commencing temporary shutdown of the facility that is aimed to last at least four months.

 

FOREX: Philippine peso depreciated week-on-week against the US dollar by P0.21 to P48.25 from P48.04 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

The oil companies implemented the price increase effective today, 23 February 2021. Gasoline has increased by P1.20 per liter, P0.95 per liter for diesel and kerosene by P1.00-P1.05 per liter.

These resulted to the year-to-date adjustments to stand at a net increase of P5.20/liter for gasoline, P4.85/liter for diesel and P4.35/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.

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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  Forexpedia: A sideways market is a term used to describe price movement where the price fluctuates within a tight range for an extended period of time without trending one way or the other. Sideways markets also get referred to as range-bound markets, ranging markets, non-trending markets, trendless markets, or choppy markets.

 

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