WORLD OIL PRICES (May 25-29, 2020 trading days)
Dubai crude increased week-on-week by about US$1.20/bbl. MOPS diesel has also increased by around US$0.70/bbl, while on the contrary, MOPS gasoline has decreased by almost US$0.70 per barrel.
Reasons for the Adjustment
- Given the collapsed of global oil demand from the coronavirus pandemic, and with the OPEC+ and allies’ supply cut deal, oil supply and demand is seen by Platts to completely rebalance into year 2022. This takes into account the crude surplus sitting in storage around the world both onshore and in floating storage. First wave of VLCCs are already starting to unload its floating crude storage barrels in Asia.
- The OPEC+ (Saudi Arabia and Russia) group pledged in April production restrictions of 9.7 million barrels per day (MMB/D) in May and June, before easing the cuts to 7.7 MMB/D for July through December, and then further to 5.8 MMB/D until the end of April 2022. Saudi Arabia has since said it will cut a further one (1) MMB/D in June.
- Saudi Arabia and some other OPEC oil producers are considering to extend the current record high output cuts of 9.7 MMB/D until the end of 2020, but have yet to win support from Russia. This was partly rectified by subsequent reports that President Vladimir Putin agreed with Saudi Arabian Crown Prince Mohammed bin Salman on the need for "close coordination", but then Russian oil companies have divided opinions on the proposal.
- The OPEC+ group is due to hold an online conferenced in June 8-10 to discuss their output policy.
- Asian customers of Abu Dhabi National Oil Company (ADNOC) are reportedly receiving five percent (5%) term supply cut for July across Abu Dhabi crude grades (Murban, Das Blend, Umm Lulu and Upper Zakum). ADNOC has been cutting supply to China in its May and June loadings in compliance to the OPEC cut deal.
- While many refiners in North Asia are scheduled to undergo turnaround, major refiners in China are increasing run rates. Crude throughput at China's major refineries is expected to climb in May from 73% in April. Independent refineries in Shandong continue to ramp up run rates from record low of 44% in February and grew to 59% in March due to higher margins as feedstock plummeted in line with the crude prices. China’s state-owned oil majors keep runs steady at 76%.
- For gasoline market in Asia, concerns over the slow pace of demand recovery weighed on regional fundamentals. The driving movement in Vietnam, South Korea and Japan in May are said to have yet recovered to pre-coronavirus levels, having only improved slightly from April when the strictest of the lockdowns were in place.
- Asian gasoil/diesel market participants are monitoring the supply-demand balance in the region. They were saying that prices are supported by tighter supply due to low refinery runs and lack of meaningful indications of a wide-ranging demand recovery.
- For kerosene/jet fuel, Platts Analytics expects demand to take the hardest hit in Asia as countries imposed strict air travel restrictions. Air cargo demand held up better though, due partly to higher demand for air shipments of intermediate goods, including pharmaceutical and food supplies.
FOREX: Philippine peso depreciated week-on-week against the US dollar by P0.05 to 50.67, from P50.72 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 02 June 2020, the oil companies implemented a price increase/decrease in petroleum products. Diesel and kerosene have increased by P0.25/liter and P0.80/liter respectively. While a decrease of P0.20/liter has been effected on the price of gasoline.
This brings the total year-to-date adjustments to stand at net decrease of P9.72/liter for gasoline, P12.19/liter for diesel and P15.64/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