WORLD OIL PRICES (December 07-11, 2020 trading days)
Dubai crude has increased week-on-week by almost US$1.30/bbl. MOPS gasoline and diesel have also increased by around US$1.60 and US$1.70 per barrel, respectively.
Reasons for the Adjustment
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Oil balances are seen tightening in Q4 and will continue through 2021 .
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Global oil demand is expected to contract by 8.7 million b/d (MMB/D) in 2020, before growing by 6.3 MMB/D in 2021.
- Global oil supply is also expected to be down by 7.2 MMB/D in 2020, and then up by 3.5 MMB/D in 2021.
- S&P Global Platts Analytics expects global benchmark Dated Brent prices to average $41/b in 2020, before rising to $46/b in 2021.
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Crude oil imports by Asia’s “Big Four”1 dropped to the lowest this year, but market analysts say they are poised to pick up in 2021 as demand rebounds.
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Asia’s “Big Four” crude imports were showing an upward trend after hitting a low in April due to the pandemic, but dropped to the lowest this year in October.
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Crude oil imports by Asia’s “Big Four” seen to pick-up strongly in 2021 with higher crude runs as demand recovers; much of this increase will be met by OPEC+ production as US faces declines.2
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- Crude futures settled at nine-month highs as demand outlooks improved along with the continued rollout of a COVID-19 vaccine and signs of rising Asian crude oil demand.
- An overnight oil price rally accelerated in US trading ahead of a US-FDA advisory committee meeting last 10 December that is expected to discuss issuing an Emergency Use Authorization for the Pfizer-BioNtech vaccine.
- Continued signs of Asian crude demand recovery further supported prices.
- Data collected by S&P Global Platts showed China's state-owned refineries planned to increase crude throughputs in November by an average of one percentage point month-on-month to 79.8% of capacity.
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OANDA3 senior market analyst Edward Moya noted that the impending lockdowns across the US and the potential hit to crude demand is being compensated by improving trends across Brazil, the UK, and most of Asia. With the exception of the US, the crude demand outlook over the next few months is improving.
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Two oil wells in Iraq's northern Khabbaz field in Kirkuk province was reported to have potentially supported oil prices due to potential geopolitical risk.
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The Asian gasoline market looked set to continue its upward momentum as a stronger US RBOB/Brent crack, amid a new wave of COVID-19 vaccine optimism, combined with fresh gasoline demand from Southeast Asia lifted sentiment among participants.
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Firmer demand and easing concerns over a potential influx of gasoil barrels into Asia on a Singapore-bound VLCC4 spurred the Asian gasoil market higher.
FOREX: Philippine peso appreciated week-on-week against the US dollar by P0.01 to P48.07 from P48.06 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 their price increase effective today, 15 December 2020. Gasoline increased by P0.50 per liter, diesel by P0.60 per liter and P0.55 per liter increase for kerosene.
These resulted to the year-to-date adjustments to stand at a net decrease of P2.72/liter for gasoline, P6.76/liter for diesel and P10.04/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 Asia’s Big Four – China, India, Japan and South Korea
2 Asia Pacific Oil Market Forecast, December 10, 2020
3 OANDA Corporation is a registered Futures Commission Merchant and Retail Foreign Exchange Dealer with the Commodity Futures Trading Commission
4 VLCC - Very Large Crude Carriers