WORLD OIL PRICES (January 27-31, 2014 trading days)

World crude prices were mixed over the week’s trading days resulting to a slightly lower average for Dubai crude as against its week. On the contrary, Brent and WTI crude benchmarks showed marginal uptick as demand for heating oil outpaced supply in view of cold snaps in the Northeast, resulting in a drawdown of US distillate stocks. However, prices were tempered by the following:

• Concerns over Chinese growth. Economists expected Chinese gross domestic product growth to slow to 7.4 percent in 2014 from 7.7 percent in 2013.

• U.S. Federal Reserve scale back bond buying. The Federal Reserve on Wednesday decided to trim its bond purchases by another $10 billion as it stuck to a plan to wind down its extraordinary economic stimulus despite recent turmoil in emerging markets.

• Stronger US dollar. US dollar traded near a 2-week high against a basket of currencies, supported by the U.S. Federal Reserve's plan to keep cutting monetary stimulus and by data released on Thursday showing strong U.S. gross domestic product in the fourth quarter. A strong greenback usually weighs on commodities such as oil that are priced in the currency.

• Increase in OPEC output in January. OPEC production increased in January, from December's 2-1/2-year low, due to a partial recovery in Libyan supply and higher shipments from Iraq and Iran.

Specifically in Asia, Platts Asian gasoline cracks were largely steady, although sentiment remained mixed amid expectations of increasing supply in the Singapore market. The physical 92 RON gasoline market flipped into a contango (a situation where the futures price of a commodity is higher than the expected spot price) as a widening East-to-West spread signals a potential rise in supply heading to the regional market.

On the other hand, the Asian gasoil/diesel market was on a recovery track during the week, amid a drawdown in middle distillate stock levels in Singapore, and anticipation of a pick-up in demand after the Lunar New Year holidays.

Overall, Dubai crude remained relatively steady. MOPS diesel increased by about US$0.50/bbl while MOPS gasoline decreased by about US$0.10/bbl.

FOREX:  Week-on-week value of Peso against the US dollar depreciated further by P0.07 to P45.30, from P45.23 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 4 February 2014, the oil companies implemented an increase in the prices of gasoline and diesel by P0.10 and P0.25 per liter, respectively.

Further, on 1 February 2014, the price of LPG rolled back by P1.45/kg (VAT inclusive).  It was due to the decrease in LPG Contract Price for February by US$47.00/MT to US$970 from US$1,017/MT in January.

Year-to-date price adjustments stand at a net decrease of P0.30/liter for gasoline, P0.60/liter for diesel and P9.11/kg for LPG.

* RON 95

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