WORLD OIL PRICES (For January 21-25, 2013 trading days)

Lingering concerns about the U.S. economy, with lawmakers wrangling over spending cuts and the nation's debt ceiling, and Algeria hostage crisis have been uplifting prices over the past weeks. However, recent developments, as follows, further supported the price up-trend:

• January Oil Market Report of IEA that disclosed the:

• Increase in Chinese oil demand by 7.7% more in December 2012 as against December of 2011
• Declined Saudi output in December from 30-year highs
• Low to normal level of heating fuel inventories in the OECD due to winter season

• Shut in of In Amenas production gas field in Algeria, including an estimated 50,000 b/d of liquid hydrocarbons which include crude oil. Algeria produced about 1.20 million b/d of crude oil in 2012;

• Gains in equities and a weak dollar;

• Hopes for improved growth in global markets, specifically Japan and China;

• Aggressive monetary easing and heavy fiscal spending by Japanese government to offset yen's softer trend e. g. more bond purchases this year
• Newly approved 10.3 trillion yen ($114.5 billion) economic stimulus plan, which is expected to be felt in the economy from around April-June
• Signs of greater capital market openness in China
• Growth in China's giant factory sector accelerated to a two-year high in January

• Expectation that demand for oil by Japan remain stiff as there would be no immediate restart of the bulk of the country’s nuclear capacity;
• Weaker US dollar that offered strong upside momentum to the market; • U.S. oil demand grew last week by the most in a month;
• Reports that global economy remains generally positive.

As prices of oil held in positive territory, other reports were limiting the upside progress, such as, the (1) oversupply, particularly stocks at Cushing that hit record levels earlier this month, (2) latest data showing a plunge in British unemployment for the 10th consecutive quarter and that jobless claims hit their lowest level since mid-2011 in December, and recently (3) International Monetary Fund's forecast for slower global growth for the year 2013.

Week-on-week, Dubai crude increased more than a dollar per barrel. Likewise, MOPS gasoline recuperated as it increased by about US$3/bbl; diesel as well increased by US$1/bbl.

FOREX: The week-on-week peso per US dollar appreciated by P0.05 to P40.66, from P40.61 in previous week.

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 29 January, the oil companies implemented an increase of P0.90/liter for gasoline and P0.35/liter for diesel.

These adjustments resulted to a month-to-date net increase of P0.20/liter for both gasoline and diesel.

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