WORLD OIL PRICES (August 4-8, 2014 trading days)

Early into the trading week, oil prices in New York fell to a six-month low on concerns about weak gasoline demand in the US and lackluster Chinese economic data.

Analysts say that weak demand for petroleum products has been "a persistent overhang" all summer during the peak driving season. They also cited disappointing data from China, the second-biggest oil consumer after the US, as a factor in the drop. Reportedly, the HSBC China services Purchasing Managers' Index (the dividing line between expansion and contraction) slipped to 50.0 in July, down from 53.1 in June and its lowest level in nearly nine years, indicating a still fragile recovery.

Market experts also cited a report that said Libya's Es Sider port could soon resume exports, in spite of persistent violence in Tripoli and other parts of the country. They continue to see material risk to supply from Libya, Iraq, and Russia, but deemed that the market over the past six weeks has become increasingly complacent as regards supplies. Nonetheless, market analysts continue to monitor key petroleum exporters Iraq and Russia as well as Libya, noting that the weak demand picture is offset by concerns about political problems that could affect production in these oil-producing countries.

While still generally lower than the previous week, prices later in the trading week have rallied following reports that the Obama administration is considering air strikes in Iraq. Specifically, the gains followed reports that President Barack Obama was weighing military strikes against Sunni extremists in Iraq after they attacked a city of predominantly Iraqi Yazidis, members of an ancient pre-Muslim religious minority.

On the Asian market per Platts’ reports, gasoline market sentiment remains largely bearish, although the product's cracks were likely to receive a boost Thursday from an overnight rally in benchmark RBOB prices following a larger-than- expected draw in US gasoline stockpiles. The data showed US gasoline stocks stood at 213.85 million barrels after falling 4.39 million barrels in the week ended August 1, almost 1% below the five-year average.

However, regional fundamentals in Asia continue to remain weak amid rising supply and steady demand.

Moreover, gasoil market in Asia continued to see muted demand Thursday, with industry sources largely agreeing that Asia remained oversupplied, as excess cargoes struggled to find outlets especially as arbitrage opportunities remained thin. It was also noted that the gasoil market in the Middle East was uplifted by stockpiling ahead of the Muslim holidays.

Overall, international prices decreased week-on-week, i.e. Dubai crude by US$1.63 to about US$104/bbl, MOPS gasoline by US$3.93 to about US$109/bbl and MOPS diesel by US$0.89 to US$118/bbl.

FOREX: Peso per US dollar rate depreciated week-on-week by P 0.34 to P43.82, from P43.48 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 11 August 2014, most of the oil companies implemented a decrease of P0.85 for gasoline. There were no price adjustments for diesel and kerosene.

With the said price movements, gasoline and diesel now have a year-to-date net decrease of P2.34 and P2.60, respectively.

* RON 95

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