WORLD OIL PRICES (June 29-July 03, 2020 trading days)
Dubai crude has slightly increased week-on-week by around US$0.05/bbl. MOPS diesel has
also increased by almost US$0.35 per barrel while MOPS gasoline has decreased by about
US$2.00 per barrel.
Reasons for the Adjustment
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The sour crude complex had steadied recently after rallying for most of June, following the extension of OPEC+ production cuts. Platts have noted that a sustained or continued uptick in the backwardated1 market structure could see the release of more barrels from floating storages this month.
- Improved demand outlooks caused crude futures to settle at four-month high on 02 July, following reports of a stronger-than-expected US jobs.
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However, a surge in COVID-19 cases in some parts of the US continued to weigh on markets. The oil complex came under pressure following a Reuters report showing a one-day spike of 10,000 new COVID-19 cases in Florida, heightening fears that a resurgent pandemic will lead the states to reinstitute lockdowns. Reported increases of rising new COVID-19 cases in the states that had reopened their economies could slow or reverse demand recovery, Platts said.
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Meanwhile, according to Russian energy minister Alexander Novak, OPEC and non-OPEC allies have not made any decisions about rolling over their 9.7 million b/d (MMB/D) cuts beyond July as the group observes the demand trend. The group's ministerial committee, co-chaired by Saudi Arabia and Russia, will meet on July 15 to assess compliance and market conditions as well as potentially recommend changes in output quotas.
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Azerbaijani energy minister is of the view that the market would need at least two years to reach the equilibrium point. "In the face of uncertainty, it is impossible to state with full confidence that in the near future demand will fully recover”.
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But according to report by the oilprice.com the huge volumes held at sea have started to shrink and expected to continue declining into the second half of this year. As quoted from Reuters, crude oil in floating storage dropped to below 150 million barrels (MMB) by the end of June, from as high as 180 MMB in April, when global oil demand crashed by 30 MMB/D. The volume of refined products held at sea also dropped to 50 MMB from the peak of nearly 75 MMB in the middle of May.
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Likewise, the IEA and Bloomberg stressed that floating storage of crude oil dropped in May and June as most countries have lifted their lockdowns.2
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In Asia, demand fundamentals continue to look positive amid recovery in driving activity and low run rates amongst Southeast Asian refiners. However, Platts noted that demand from Indonesia (the region’s largest importer of gasoline) remains subdued as the country continues to battle the coronavirus.
FOREX:Philippine peso appreciated week-on-week against the US dollar by P0.28 to 49.77,
from P50.06 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
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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