WORLD OIL PRICES (May 26-30, 2014 trading days)

World oil prices dipped on Monday amid thin trading, with markets in London and the United States closed for a holiday. Nonetheless, prices were underpinned by tensions in oil-producer Libya and by uncertainty over the situation in Ukraine following a presidential election there.

Market analyst opined that the return of Libya have been anticipated by the markets for several weeks now, but the government's reassertion of control over ports held by rebels has taken longer than expected. Consequently, a power battle and a tense situation in said country remains a matter of concern to the market.

As for Ukraine, the successful presidential election in the country over the weekend helped ease some concerns despite continued fighting in the pro-Russian east. However, Brent crude oil prices found renewed momentum on Tuesday as the conflict in Ukraine worsened. Pro-Russian separatists intensified the tension by taking control of an airport just hours after the elected President, Petro Poroshenko, pronounced his intentions to end the conflicts. Ukraine launched air strikes in response to the airport take-over, and Pres. Poroshenko was confident that his military campaign would contain the separatists in “a matter of hours.” The situation remains a matter of concern to traders considering that Ukraine sits across routes for the export of Russian oil and gas towards Europe. Investors fear that a full-blown conflict will disrupt supplies and send energy prices soaring.

Crude oil futures finished lower for the week as U.S. oil stocks at Cushing dropped by 1.5 million barrels, reportedly now at the lowest level since November 2008.

In the Asian gasoline market, Platts reported of the traders’ expectation of supply to remain tight amid on-going refinery maintenance. Further, strong demand from the Middle East has drawn more gasoline barrels from India. An uptick in gasoline demand from major buyer Indonesia ahead of Ramadan month is also expected, but no spot buy tenders have been issued yet.

As for the Asian gasoil, market remained weighed down by an oversupply in the period, amid thin demand from the Asia Pacific region, exacerbated by the ongoing seasonal fishing ban in the South China Sea which curbed diesel consumption in China. In addition, thin demand in Europe has led to a weaker structure that also impacted Asia. However, gasoil price is expected to recover in the near term ahead of the Muslim fasting month of Ramadan and possible cuts in refinery run rates. The annual Ramadan demand starts from end-June.

Overall, week-on-week Dubai crude had a marginal decrease of about US$0.05/bbl. MOPS diesel decreased as well by about US$0.70/bbl contrary to MOPS gasoline that increased by about US$0.80/bbl.

FOREX: Week-on-week value of Peso depreciated against the US dollar by P 0.12 to P43.82, from P43.70, 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 3 June 2014, most of the oil companies implemented an increase of P0.30/liter for gasoline and a decrease of P0.10/liter for diesel and kerosene.

With the said price adjustments, gasoline now stands at a year-todate net increase of P0.70/liter, while diesel has a net decrease of P1.40/liter, as can be seen in the table below.

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