WORLD OIL PRICES (Nov 18-22, 2013 trading days)

Oil prices were softened at the start of the trading week (Monday, Nov 18) ahead of the reopening of negotiations in Geneva to curtail Iran's nuclear program. Iran resumes talks this week (Wednesday) with six world powers (U.S., Britain, France, Russia, China and Germany) to resolve a decade-long standoff over Iran's nuclear program. Negotiations last week failed to reach an agreement but the U.S. is hopeful that an initial deal with Iran can be reached in the next round of talks. These world powers’ offer to gradually roll back sanctions on Iran has raised concerns of Iranian oil flooding world markets, which already have abundant supplies.

By Wednesday, news of an outage at a major European refinery helped sentiment on the firming of regional gasoline fundamentals. Specifically, Total’s 350,000 b/d Antwerp refinery – Europe’s third largest – was partially shut overnight following an explosion at a gasoline unit that killed two people.

On Thursday, 21 November, global oil prices rose in reaction to a smaller-than-expected growth in US crude stockpiles, while markets awaited the outcome of key talks over Iran's nuclear program. The US-DOE on Wednesday said that the country's commercial crude oil inventories had risen by 400,000 barrels last week - lower than market expectations for a 700,000 gain.

The gains, however, were short-lived as focus returned to the Iran nuclear issue, with investors waiting to see if Iran will get sanction relief in exchange for curbing its nuclear program. On Friday, Iranian negotiators said that progress was being made in talks in Geneva with world powers, expressing hope to bridge differences and sign an elusive deal over Tehran's nuclear drive.

In Asia, the Asian gasoline market has already firmed over the past week, helped by expectations of a tighter December market. Traders said Wednesday that Indonesia’s slightly higher term lifting in December, following its spot purchases, will likely strengthen fundamentals given the absence of Taiwanese spot cargoes for next month amid already low inventory levels.

The Asian gasoil market also continued to firm, with cash differentials rising amid tight supply due to limited exports from Japan and South Korea. Market analysts say refiners maximize kerosene production and minimize gasoil production to build kerosene stocks for the winter.

Overall, while there is a softening in prices last week, the averages over the previous week are still higher.

FOREX: Peso per US dollar rate depreciated week-on-week by P0.08 to 43.68, from P43.60 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 26 November 2013, most of the oil companies implemented a price increase of P0.45/li for gasoline and P0.70/li for diesel effective 26 November 2013. No increase was effected in the areas that were affected by the typhoon.

Year-to-date net increase for gasoline and diesel stands now at P1.69 and P2.73 per liter respectively.

* RON 95

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