Oil Monitor as of 28 April 2020

Date published: April 30, 2020

WORLD OIL PRICES (April 20-24, 2020 trading days)

Dubai crude decreased week-on-week by more than US$3/bbl.  MOPS gasoline decreased as well by more than US$1/bbl along with diesel by nearly US$6/bbl.

Reasons for the Adjustment

  • S&P Global Platts Analytics now sees 2020 global oil demand contracting by 7.8 million b/d (MMB/D), revised from a 4.5 MMB/D decrease in its March outlook for 2020 of 97.6 MMB/D as against 2019 level of 102.1 MMB/D. Oil demand is now projected to contract in every month through December.
  • OPEC predicted oil demand contracting in 2020 by as 6.8 MMB/D to 92.82 MMB/D vs from 100 MMB/D in 2019.
  • The International Energy Agency (IEA) projected global oil demand to fall by a record 9.3 MMB/D this year as government implemented lockdowns keep the economy at a near standstill.  The IEA further projected that demand for crude would drop in April by 29 MMB/D, equivalent to 29% of the world’s 100 MMB/D oil demand figure from 2019.
  • S&P Global Platts Analytics expects global refinery downtime to reach 19.3 MMB/D the week ending April 24, and remain around that level for the week ending May 1.
    • Asia’s regional downtime will sharply increase to over 5 MMB/D for the week ending April 17 as plants in India are increasing the magnitude of run cuts to 50%.
  • Crude futures in Asia had a brief spark of buying activity on 22 April with some Chinese refiners seeking Middle East sour crude cargoes after the China's Ministry of Commerce issued 52.99 million mt (388.42 million barrels) of crude import quotas to 31 qualified independent and non-major state-owned refineries in the second batch for 2020.
    • The new allocations take the total crude quotas awarded to 44 qualified refineries to 152.61 million mt (1,119 million barrels) for 2020, accounting for 85% of the refineries' annual quota ceiling.
  • Some OPEC members like Kuwait and Nigeria has already begun ramping down its crude production ahead of the May implementation of the OPEC+ output cut agreement.
  • Some regulators in US states are considering options to store crude oil. North Dakota is considering to quickly build two new crude storage tank farms of up to 500,000 barrels; Houston Ship Channel and the Port of Corpus Christi already had new tank storage under construction; Texas energy regulators are debating whether to mandate production-cut quotas to help stabilize prices and keep storage from overflowing.
  • About 1.4 mil b/d of Saudi crude is heading to US in coming weeks for which US senators call for bans or impose tariffs on imported crude oil.
  • US-EIA data of gasoline demand ending week of April 17 increased 230,000 b/d to 5.31 MMB/D, well under a 5.7 million-barrel build expected in a Platts late-Monday analysis.
  • The Asian gasoline market dipped further in the middle of the trading week, with as more gasoline-laden ships from Indian refiners are set to head toward Singapore.
    • Spot cargoes from Indian refiners have picked up significantly over April, as the country continues to face tepid demand amid an extended COVID-19 lockdown period.
  • The plunging global crude oil market has also exerted downward pressure on the Asian gasoline complex.
  • The Asian gasoil market remained weak due to global coronavirus-induced lockdowns, but some pockets of demand emerge as buying interest for storage increases with the market structure in deep contango1.  Compounding the weak demand across the region, unviable arbitrage economics owing to a narrow Exchange Futures for Swaps spread has hampered any opportunity to drain surplus barrels from the region, amplifying surplus barrels of diesel/gasoil.
  • China's gasoil exports hit a record high in March amid limited domestic demand during the country's lockdown and high inventories. The country exported 2.83 million mt (19.86 million barrels) of gasoil in March, up 4.4% year on year, latest General Administration of Customs data showed. Gasoil exports were last higher at 2.71 million mt in March 2019.

FOREX: Philippine peso depreciated week-on-week against the US dollar by P0.13 to 50.80, 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

On April 28, 2020, the oil companies rolled back their prices of gasoline by of P0.20/liter, diesel by P1.80/liter and kerosene by P2.15/liter.

This brings the total year-to-date adjustments at net decrease of P15.27/liter for gasoline, P16.89/liter for diesel and P21.90/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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