WORLD OIL PRICES (July 6-10, 2020 trading days)
Dubai crude has increased week-on-week by around US$1.20/bbl. Both MOPS gasoline and diesel have also increased, gasoline by almost US$2.00 per barrel and diesel by nearly US$1.30 per barrel.
Reasons for the Adjustment
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Coronavirus cases continue to rise in the US, Brazil and many OPEC+ nations as noted by Rystad Energy oil markets analyst Louise Dickson. He
said that as these countries continue to get hammered by COVID-19, demand is at stake and OPEC may step in to decide to keep deeper cuts into August, instead of increasing the group's production by a planned two (2) million b/d (MMB/D). -
The next OPEC joint ministerial monitoring committee meeting is slated for tomorrow-July 15 to review market conditions. According to the S&P Global Platts survey, OPEC+ has maintained a 106% compliance rate through June, as its 13 members reportedly pumped 22.31 MMB/D and making additional voluntary cuts. Iraq and Nigeria made significant progress toward complying with their quotas. The deal exempts Iran, Venezuela and Libya from the cuts.
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Sentiment in the sour crude market was relatively steady as market participants awaited more fresh cues to emerge in the coming days. Overall oil demand has been largely plagued by poor refining margins, with a lack of substantial recovery owing to the global COVID-19 pandemic.
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Although global crude demand has been slowly rising and US jobless claims have fallen, concerns remain that increasing coronavirus cases in the US and worldwide could put a halt to any progress. The inventory report from the US-Energy Information Administration (US-EIA) on 08 July showed rising US crude stocks amid falling oil exports, albeit falling gasoline storage volumes that helped offset the bearish news.
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The Asian gasoline market gained ground, as fresh support from the US strengthened gasoline crack spreads. The support was led by a higher-than-expected drawdown in US gasoline inventories, which allayed concerns of slow gasoline demand recovery prior to the US holiday weekend.
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According to the US-EIA data, total gasoline inventories fell 4.84 million barrels (MMB) to total 251.68 MMB in the week ended 03 July, overshadowing American Petroleum Institute (API), and analysts' expectations. While support came from the US this week, Asian dynamics began to see downside pressures as participants weighed in expectations of higher Chinese supply. Several Chinese refineries have been reported to be raising export volumes for July.
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In the Asian gasoil/diesel market, sentiment firmed after softening earlier in the week when regional requirements for July were heard to have been largely met.
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Traders also say that Asia demand is improving - Europe is capable of absorbing all the barrels that Asia sends and North Asia and Southeast Asia are buying gasoil. Also, further upside could be expected as Asian refineries were generally running at low rates and gasoil demand was picking up.
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China remains a key factor in any discussion about overall regional supply balance.
FOREX: Philippine peso appreciated week-on-week against the US dollar by P0.30 to 49.47, from P49.77 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 14 July 2020, the oil companies implemented a price increase of P0.65/liter for gasoline, P0.30/liter diesel and P0.40/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