Oil Monitor as of 28 July 2020

Date published: July 28, 2020

WORLD OIL PRICES (July 20-24, 2020 trading days)

Dubai crude has increased week-on-week by almost US$0.40/bbl. Both MOPS gasoline and diesel have also increased: gasoline by around US$0.15 per barrel and diesel by nearly US$0.75 per barrel.

Reasons for the Adjustment

  • Crude oil futures were range bound on continuing confidence in financial markets and recovery from the coronavirus pandemic, despite a bearish US stock build.  Growing bullish sentiment on the demand recovery has been the main driver behind the buoyant crude oil prices in recent days with expectations of further recovery as the potential for a recovery in air travel becomes more likely.
  • On the supply side, OPEC+ production cuts appear to be holding up, but the duration of lower production depends on the quality of the relationship between Russia and the rest of the alliance.
  • Sucden UK Head of Research Geordie Wilkes said that the OPEC+ supply cuts have been positive but could see some increase in output in August if the demand picture continues to improve; he added that further increases depend on Russia/OPEC relations.
  • The Asian gasoline market weakened as a lower-than-expected drawdown in US gasoline inventories raised concerns that support from the US may be waning.  Market sources noted that the missed expectations brought the attention back to US gasoline demand, with latest data signaling that demand has started to settle below seasonal norms after rebounding following April lockdowns.
  • Against the backdrop of easing US gasoline demand, Asian fundamentals continue to weaken as more supply was noted emerging. 
  • As to the Asian gasoil/diesel market, industry sources noted subdued activity, as participants were digesting both bullish and bearish factors for pricing signals.  Market observers are also of the opinion that all eyes were on Chinese third round of export quota as well as outflows from key exporting countries as several regional refineries were heard to have already ramped up production.

FOREX:

Philippine peso appreciated week-on-week against the US dollar by P0.12 to 49.37 from P49.49 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 28 July 2020, the oil companies implemented a price increase of P0.10-P0.30 per liter for gasoline, diesel by P0.25/liter and P0.30/liter for kerosene.  

This brings the total year-to-date adjustments to stand at a net decrease of P4.77/liter for gasoline, P8.29/liter for diesel and P12.54/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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