WORLD OIL PRICES (October 5-9, 2020 trading days)

Reasons for the Adjustment

• Platts report disclosed that Saudi Aramco face challenges to increase exports to Asia. China’s independent refineries are struggling with limited crude import quotas, high inventory levels, and financing issues from the government. Demand in most other Asian importers is expected to remain flat amid continued weak refining margins and a slowing demand recovery.
• JP Morgan predicted of worsening global oil demand outlook due to a potential rise in coronavirus cases coming winter season; thus would likely prompt the OPEC to reverse its planned easing of oil cuts in 2021. It sees Saudi Arabia offering deeper cuts, below its current quota.
• Saudi Arabia may push to cancel the next OPEC+ quota increase scheduled for January 2021, which will increase agreed supply by 2 million b/d (MMB/D). The report may be confirmed in the next OPEC+ meeting in November.
• Further complications have also added to OPEC’s plan to increase output due to the impending return of Libyan production, over quota compliance and compensation cuts of members, second-wave COVID-19 outbreaks, and the US Presidential election.
• Nonetheless, the oil market is seen to be indifferent on the upcoming US elections, according to the oilprice.com.
  • Democratic candidate Joe Biden appears bearish for the oil markets on his determination to stop the key oil and gas projects on federal lands and waters, as he pledged to lower carbon emi ssion status to zero by 2050. The idea of less US production would appear beneficial to OPEC and other producing countries.
  • On the other hand, President Trump has taken credit for the spectacular surge in US shale oil production and sworn to continue doing if reelected.
• Crude benchmarks gained about 9% last week, reportedly the biggest weekly rise since June, due to concerns on the strike in Norway and the hurricane that headed to the US Gulf Coast that reduced crude output. Hurricane Delta halted most oil and nearly two-thirds of natural gas output of the region, covering as well the US offshore Gulf of Mexico.
• With the overall refining margins in gasoline still negative, prices are seen to remain supported by supply balances. However, outlook for gasoline demand in Asia is mixed with the impact of COVID-19 that varies between countries. In the US, gasoline stock levels decreased ahead of expected further disruptions to Gulf Coast refining and logistics as Hurricane Delta makes landfall in Louisiana last Friday, 09 October.
• Stocks of middle distillates, which include gasoil/diesel, in Singapore fell by 2.8% week-on-week to 14.84 million barrels. But stock levels are still comparatively high at 27% above year-ago levels. Platts noted that while bearish fundamentals persist, the upcoming seasonal heating demand and increased refinery maintenance in October is seen to support the market in the near term.

FOREX:  Philippine peso appreciated week-on-week against the US dollar by P0.07 to P48.39 from P48.45 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

These resulted to the total year-to-date adjustments to stand at a net decrease of P4.42/liter for gasoline, P10.26/liter for diesel and P13.64/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