WORLD OIL PRICES (April 6-10, 2020 trading days)
Dubai crude decreased week-on-week by more than US$3/bbl. MOPS gasoline and diesel decreased as well by more than US$2/bbl and nearly US$4/bbl, respectively.
Reasons for the Adjustment
- OPEC+ and G20 countries agreed over the weekend to an overall production cut of 9.7 million barrels per day (MMB/D) starting in May and June, down from the 10 MMB/D originally envisaged, and gradually reducing the cuts through April 2022.
- Following the agreement, Platts Analytics estimated the actual realized cut could be 5.5-6.5 MMB/D for May vs April, which would be materially short of the 10 MMB/D imbalance seen for May and June, thus it noted that prices will still need to head lower to force large and immediate supply curtailments.
- OPEC now expects global oil demand to drop by 6.8 MMB/D year on year in 2020 to 92.82 MMB/D, with April having the biggest contraction at about 20 MMB/D, according to its latest monthly Oil Market Report dated 16 April 2020.
- 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.
- In Asia, the regional crude distillation unit (CDU) downtime total was revised upwards to close to 4 MMB/D for the week ending April 10, around 70 thousand b/d (MB/D) higher than last week’s forecast. However, 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%.
- US’ Energy Information Agency (EIA) data disclosed total US gasoline stocks still growing upwards by 4.91 million barrels (MMB) to 262.22 MMB, with gasoline demand falling to a record low 5.07 MMB/D.
- Singapore light distillate stocks that includes gasoline jumped by 14% week on week to thirteenth-month high of 16.48 MMB, attributed to slowing demand due to coronavirus lockdown in key gasoline export markets in the region.
- S&P Global Platts Analytics said in a note this week that it was likely there would be some near-term additional gasoil/diesel flows directed to Asian markets because of "higher freight rates and a closed Western arbitrage”.
- The regional situation for the gasoil/diesel market was bearish on expectations of further demand losses following the announcements of extended lockdowns among major Asian economies like Malaysia and India.
- Singapore middle distillate, which include diesel, stocks jumped by 20% week-on week to 14.93 MMB, an indicative of oversupply in the market.
FOREX: Philippine peso appreciated week-on-week against the US dollar by P0.03 to 50.67, from P50.70 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 21, 2020, the oil companies have implemented price decrease of P0.55/liter for gasoline and P1.15/liter for diesel. The price of kerosene was decreased by P0.60/liter.
Total year-to-date adjustments are now at net decrease of P15.07/liter for gasoline, P15.09/liter for diesel and P19.75/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