Oil Monitor as of 13 May 2020

Date published: May 17, 2020

WORLD OIL PRICES (May 4-8, 2020 trading days)

Dubai crude increased week-on-week by more than US$7/bbl.  MOPS gasoline and diesel increased as well by more than US$5/bbl.

Reasons for the Adjustment

  • The OPEC+ alliance, Russia and nine other allies’ agreement to implement the biggest coordinated production cut in the market's history at 9.7 million barrels per day that started to take effect May 1 resulted to higher oil prices.
  • Canadian producers have likewise indicated at least 940 thousand barrels per day (MB/D) of supply shut-in.
  • Non-compliance to commitment by Iraq, and other smaller OPEC-member producers such as Nigeria and Angola, could hurt the OPEC+ group’s efforts.1. But these three countries however still contributed to the cut with an expected reduction of around 1.6 MMB/D or about 20% for month of May compared to production level in March of around 8 MMB/D.
  • The general sentiment of the market is the clear impression that supply cut is holding up while demand is slowly rising as economies starts to come out from lockdowns. Both expectations are happening in May and provided a needed surge to the low price of oil.
  • With the escalating production cut and gradual increases of refinery runs in the US, there remain a mismatch between demand and supply, quoting Citi Research that “A shift in market sentiment was lifting prices earlier this week, but the physical overhang does not want to go away just yet”.
  • While China is seen to bring higher demand as the country’s imports climbed to 10.42 MMB/D in April from 9.68 MMB/D in March, the big drop in total imports this year have yet to recover, thus, suggesting that the recovery is some way off as economies around the world fall into recession.  Meaning demand for fuels will likely remain subdued for quite some time.

FOREX: Philippine peso appreciated week-on-week against the US dollar by P0.09 to 50.53, from P50.62 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 12 May 2020, the oil companies implemented an increase in petroleum products P2.00/liter for gasoline P1.90/liter for diesel and P1.25/liter for kerosene. 

This brings the total year-to-date adjustments to stand at net decrease of P12.52/liter for gasoline, P15.09/liter for diesel and P21.25/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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