WORLD OIL PRICES (June 16-20, 2014 trading days)

Dubai crude price went up to ten-month high Friday, along with Brent and WTI at almost nine-month high, amid fears of potential oil supply disruptions from Iraq. The geopolitical situation in Iraq was said to have direct impact on global crude prices because the country is the second-biggest oil exporter in the 12-nation Organization of Petroleum Exporting Countries (OPEC) after Saudi Arabia. It has more than 11 percent of the world's proven resources and produce at an average of about 3 million barrels a day.

Reports disclosed that geopolitical situation in Iraq was becoming more unstable, with forces associated with al- Qaeda taking over the Iraqi city of Mosel and moving towards Baghdad. Though production has not been significantly affected yet, the markets speculated that oil and gas activity could eventually be disrupted, driving crude oil prices higher.

Recent reports also showed that militants were continuing an advance in western Iraq as of Sunday, killing 21 people after security forces left several towns. The militants have reportedly captured swathes of the country's north but have yet to directly threaten the key oil-producing region in the south. With this development, analysts believe that prices will remain relatively stable at current levels as long as the crisis does not spread to Iraq's south, where most of its exports originate.

For the Asian market, Platts noted that gasoline supply in Asia has tightened on increased demand from the Persian Gulf. A huge outflow, particularly of the 95 RON grade, towards the Middle East rather than to Singapore's blending tanks, pushed the price higher despite steady demand for the grade from regional end-users. Singapore data meanwhile showed a sharply lower gasoline imports into Asia. Imports of gasoline with 90 RON octane and above or under 97 RON unleaded reportedly dropped 65.4% to 86.86 million barrels in the week ended June 18. While regional supply declined, market sources stressed that demand remained stable from regional buyers such as Malaysia.

With regards to gasoil/diesel, Platts stressed that gasoil market remained weak amid an abundance of supply in the region, while demand failed to keep pace with expectations. Demand has held steady from earlier this year, but there remains a supply overhang as the much anticipated summer demand has yet to emerge.

Overall, week-on-week Dubai crude increased by about US$3.20/bbl. Similarly, MOPS gasoline increased by US$3.60/bbl as well as diesel by US$3.40/bbl.

FOREX: Week-on-week value of Peso depreciated against the US dollar by P 0.21 to P43.90, from P43.69, in the preceding 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 today, 24 June 2014, most of the oil companies implemented an increase of P1.30 for gasoline, P1.20 for diesel and P1.45 for kerosene.

With the said price adjustments, year-to-date total adjustments for gasoline stands now at a net increase of P1.30/liter, while diesel has a net decrease of P1.00/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