WORLD OIL PRICES (For Dec 24-28, 2012 trading days)

Oil prices were on the up-trend over the week on hopes that U.S. political leaders were getting closer to avert across-the-board tax increases and spending cuts that was set to trigger on January 2, 2013.

Negotiators for the White House and Congressional Republicans in Congress reportedly narrowed their differences on its legislation to avert “fiscal cliff”. But an unclear picture of the budget policy of the U.S. economy as the year ended marginally reverted oil prices by the end of the week.

On the Asian ground, Platts commentaries reported that gasoil market was said to have supported by continued firm buying interest from Africa, which helped soak up surplus regional barrels. Oil companies from Egypt were observed seeking cargoes for February to April. For gasoline, the year ended with increased demand seen for February.

Week-on-week, Dubai crude increased by about a dollar to US$107/bbl. MOPS gasoline also rose by nearly US$3 to US$120/bbl, as well as diesel by only half a dollar to about US$126/bb.

Outlook for 2013

Looking ahead, analysts are generally in consensus in forecasting Brent crude to average around $110/b in 2013. Goldman Sachs predicted US$110 based on the recent 18 months average noting that "Brent crude oil prices have been caught in an increasingly narrow range, where they are high enough to motivate supply, but not so high as to undermine the global economic recovery. However, with the relatively low level of effective OPEC spare capacity and the ongoing tensions between Iran and the West over Iran's nuclear program, oil prices may still skewed upward”, it added.

While analysts from Commerzbank and Barclays predicted prices to be more bullish at US$121/bbl and US$125/bbl, respectively, other analysts believe a range between US$90/bbl and US$125/bbl during the next couple of years considering several equal important factors affecting the market.

Meanwhile, the surge in North American crude production and question marks on the timing of new infrastructure has made for a highly divergent set of predictions for WTI. WTI uncertainty over changes currently taking place in the North American oil sector resulted to a spread of forecasts ranging from $81 to $115 a barrel.

FOREX: The week-on-week peso per US dollar depreciated by P0.07 to P41.07 from P41.14 in previous week. These adjustments took into account the P0.07 depreciation of peso against the US dollar.

Other recommended reference sites:
(1) http://www.aip.com.au/pricing      (2) http://www.med.govt.nz/ers/oil_pet/prices/prices.html

DOMESTIC OIL PRICES

Effective 31 December 2012, most of the oil companies implemented an increase of P0.75/liter for gasoline and P0.20/liter for diesel. Other products such as regular gasoline and kerosene also increased by P0.65 and P0.30 per liter, respectively.

Contract Price (CP) for LPG for January 2013 decreased by $13/MT to $955/MT from $968/MT in December 2013. Petron and Isla Gas notified
that they will roll-back prices of their LPG by P0.50/kg (VAT exclusive) or P6.16/11-kg cylinder effective 03 January 2013.

The latest adjustments resulted to a higher year-to-date net increase for gasoline to P1.66/liter and reduced that of diesel to P1.33/liter.

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: http://www.doe.gov.ph