WORLD OIL PRICES (April 6-10, 2020 trading days)

Dubai crude increased week-on-week by nearly US$1.50/bbl. Likewise, MOPS gasoline increased by more than US$1/bbl along with diesel by less than half a dollar.

Reasons for the Adjustment

• OPEC members, Russia and allies agreed at the G20 energy summit held on 10 April 2020 to slash 10 million b/d of output for May and June. The cuts would be rolled back to 8 million b/d for the rest of 2020, and then down to 6 million b/d for all of 2021 through April 2022.
• Saudi Arabia and Russia would hold their production down to 8.5 million b/d, representing a decrease of some 3.5 million b/d for Saudi Arabia and 2 million b/d for Russia from current levels.
• US, Canada and other oil-producers are expected to support the OPEC+ deal by boosting its total cut by 50% to 15 million barrels per day.
  • However, final G20 communique was vague on the simmering divisions over energy policy and made no mention of output cuts, and pledging simply to ensure energy market stability amid the coronavirus pandemic.
  • Canada, the world’s 4th largest oil producer did not commit specific number.
  • Under the OPEC deal, Mexico was expected to cut production by 400,000 barrels per day (b/d) but it resisted the suggestion, stating its agreement with US President Trump to cut only100,000 b/d and that the US will cut 250,000 b/d as compensation to Mexico. President Trump later confirmed the deal that the US will make up the difference by cutting some US production.
• Gasoline found support before Good Friday on less expected build in US gasoline inventories.
  • US-EIA data on gasoline inventories showed an increase of 1.5 million barrels to 257.3 million barrels in the week ended April 3, way lower than estimates from the American Petroleum Institute that placed expectations for an increase of around 9.5 million barrels. Analysts surveyed by Platts earlier this week had initially pegged an increase of 5.4 million barrels.
• Overall, product surplus and weak demand remain to poise a weak gasoline market.
  • The regional supply-demand dynamic stayed firmly on its bearish route, with Indian spot supply seen rising.
  • Regional demand is slated to fall further, with more coronavirus containment measures being enforced by governments across the globe.
• Despite the current bearish fundamentals, temporary uptick in Asian gasoil/diesel market was seen before the long weekend.
• But with the closed arbitrage that hampers movement to send gasoil/diesel out of the Asian region caused supplies to pile up.
• Spot gasoil volumes, both for the ultra-low sulfur and medium sulfur grades, were seen being traded at discounts, reflecting the current poor demand situation in Asia.
  • Export of gasoil volumes from India may continue for May-loading despite refiners’ run-cuts in a bid to balance their supply-demand dynamics;
  • Traders have said that spot volumes of gasoil from India were seen over the week headed toward Singapore market.

FOREX: Philippine peso appreciated week-on-week against the US dollar by P0.15 to 50.70, from P50.86 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 14, 2020, the oil companies have implemented price increase of P0.55/liter for gasoline and P0.15/liter for diesel. The price of kerosene was decreased by P0.20/liter.

Year-to-date adjustments are now at a net decrease of P14.52/liter for gasoline, P13.94/liter for diesel and P19.15/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