WORLD OIL PRICES (August 31-September 04, 2020 trading days)
Dubai crude has increased week-on-week by about US$0.30/bbl. On the contrary, both MOPS gasoline and MOPS diesel have decreased: gasoline by around US$1.00 per barrel and diesel by nearly US$1.50 per barrel.
Reasons for the Adjustment
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Global oil supply has increased by 4 million b/d from July through Aug after dropping more than 13 million b/d from April to June. Supply will continue to rise, adding 3 million b/d from September to end-2020 and then 6.7 million b/d by end-2021, but pace of gains will slow as US supply set to decline through 2021.
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Almost all of the gains in 2021 will come from OPEC and Russia as others will struggle to keep production steady.
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With growing reliance on OPEC, geopolitical risks cannot be overlooked and will be crucial for supply in 2021 with the US elections this November. If Democrats take over the White House it could bring some of the sanctioned barrels (Iran and Venezuela) to market faster than expected. This will make market management task by Saudi Arabia even more challenging in 2021.1
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Market analysts say that a seasonal drop off in gasoline demand at the end of the US driving season as well as the start of scheduled refinery maintenance, and continued weakness in global refining margins are likely to further contribute to a drop in refinery runs and demand for crude.
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In the US, gasoline stock fell for a fourth week on refining disruptions from Hurricane Laura. US gasoline stocks have now fallen back within the five-year range, and inventories will continue to decline even as refineries begin to resume operations.
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Poor regional demand and a well supplied market continued to hamper prospects for recovery in the Asian gasoil complex, with traders saying that transportation fuel demand has been slow on the back of ongoing social distancing restrictions.
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Like Asia, traders say that the European gasoil and diesel markets have also been experiencing weak demand and high supplies, but on an even more bearish scale.
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The glut in supplies, coupled with weakening product cracks, has led some market participants to eye the possibility that refiners may enact run cuts.
FOREX: Philippine peso appreciated week-on-week against the US dollar by P0.01 to P48.55 from P48.56 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 adjustments effective today, 08 September 2020. Gasoline has decreased of P0.30 per liter, diesel by P0.45 per liter and kerosene by P0.55 per liter.
These resulted to the total year-to-date adjustments to stand at a net decrease of P4.22/liter for gasoline, P9.44/liter for diesel and P13.94/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
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1 Global Oil, Ashutosh Singh, September 2, 2020