Oil Monitor as of 09 June 2020

Date published: June 9, 2020

WORLD OIL PRICES (June 1-5, 2020 trading days)

Dubai crude increased week-on-week by almost US$5.00/bbl. MOPS gasoline and diesel have also increased, gasoline by around US$5.50/bbl and diesel by nearly US$3.30/bbl.

Reasons for the Adjustment

  • OPEC+ and its oil-producing allies agreed on 06 June 2020 to extend the group’s historic production cut of 9.6 million bpd (instead of 9.7 million bpd since Mexico did not agree anymore with its 100 thousand bpd) until end of July in an on-going effort to balance the global oil market. The agreement was finalized during the group’s video-conference meeting. The cuts will be reviewed monthly, with the next meeting slated for June 18.
  • At the same time, with the recovering demand, refineries in Asia are gradually raising its operating levels amid some demand recovery as lockdowns ease, though margins are still far from pre-COVID-19 levels. State-owned Indian Oil Corp. raised crude throughput to 80% at its nine refineries, from 40%-45% in the first half of April, due to an improvement in retail demand for fuels.
  • Economies in the West and in Asia that are emerging from coronavirus lockdowns reportedly reflects the overall improving oil demand.
  • Crude markets remain positive on the expectation that further action is imminent from OPEC+ to support price. The combination of extended cut and improved compliance is expected to be moderately supportive, and allow crude prices to consolidate recent gains. For the first time since the first half of March 2020, Dubai and Brent have pushed above US$40/bbl this week.
  • Anticipation that OPEC and allied countries will extend record production cuts through July is sending oil prices higher, though the outlook for the second half of the year remains uncertain.
  • S&P Global Platts noted that Saudi Aramco’s Official Selling Prices (OSPs) of its July crude increased by US$ 5.6-7.3 per barrels right after the OPEC+ meeting on 06 June, the largest month- on-month increase in the past ten years.

FOREX: Philippine peso appreciated week-on-week against the US dollar by P0.50 to 50.17, from P50.67 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 09 June 2020, the oil companies implemented a price increase in petroleum products. Gasoline has increased by P1.75/liter, P1.10/liter for Diesel and P1.00/liter for kerosene.

This brings the total year-to-date adjustments to stand at a net decrease of P7.97/liter for gasoline, P11.09/liter for diesel and P14.44/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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