WORLD OIL PRICES (February 27-March 03, 2023 trading days)
The week-on-week price of Dubai crude has increased by about $1.05/bbl. MOPS gasoline, diesel and kerosene have also increased by around $0.25, $3.30 and $3.20 per barrel, respectively.
Reasons for the Price Adjustment1
- Oil futures strengthened slightly in the latest week on the back of bullish demand expectations from China despite resilient supply from Russia.
o The bullish sentiment over China is supported by the expectations of the country’s lower clean oil product exports in March by about half in February of 3 million mt due to spring maintenance season amid domestic recovering demand. Yet downside risks of demand remain as high inflation in Europe and a general economic slowdown in the West could put a dampener on global oil demand growth. S&P Global Commodity Insights expect oil demand in West Europe to contract by 1.7% in 2023.
- On the supply side, oil futures are finding upward resistance from resilient Russian production and increasingly hawkish signals from the US Federal Reserve to keep monetary policy restrictive. Russia supply outlook remains relatively unchanged, as export trends support last month’s forecast for production to fall 500,000 b/d by March.
- Regional gasoline fundamentals suggest cracks are set to seasonally improve from previous week’s losses on expectations of reduced gasoline exports from China and India, as well as surging imports from other Asian countries during summer driving season.
o China's exports will likely decline in March amid an uptick in domestic demand and refinery maintenance.
o India’s March gasoline exports could also drop on month because of increased driving activity.
o Meanwhile, Australia and Indonesia will likely increase their gasoline imports in March due to seasonal and Ramadan factors respectively.
- With the upcoming summer driving season, refiners are expected to shift to gasoline mode from gasoil/diesel mode along with increased demand for high-octane components to meet summer specs. It is noted lately that diesel pricing was stronger than gasoline. It was because Asia refinery yields remain skewed to maximizing distillates, constraining refinery gasoline production.
- Asian gasoil crack strengthened on lower exports from China though the East-West arbitrage economics remained weak.
o The gasoil East-West EFS stayed largely rangebound, reflecting unattractive arbitrage economics of sending Asian barrels to the West. The European diesel market still has plenty of supply due to the stockpiling of Russian-origin oil and refiners prioritizing diesel production.
- On regional fundamentals, China’s gasoil exports in March exports are expected to decline further as domestic demand picks up slowly after the Lunar New Year holidays. Reduced gasoil exports from China are also due to refinery maintenance season.
FOREX: The average of the Philippine peso against the US dollar has not changed week over
week at P55.08.
DOMESTIC OIL PRICES
Effective 07 March 2023, the oil companies implemented a per liter increase of P0.40 for
gasoline, P1.50 for diesel and P1.25 for kerosene.
These resulted to a year-to-date net decrease for diesel at P0.90/liter and kerosene at
P1.05/liter. Gasoline on the other hand has a net increase of P5.70/liter.
For the updated prevailing retail pump price, please browse this link: https://www.doe.gov.ph/price-monitoring-charts?q=retail-pump-prices-metro-manila.
Other recommended reference sites:
• http://www.aip.com.au/pricing
• http://www.indexmundi.com/commodities/?commodity=crude-oil-dubai
• https://www.quandl.com/data/ODA/POILDUB_USD-Dubai-Crude-Oil-Price
For more information, call the
Department of Energy
Pricing: 840-2187
LPG: 840-2130
Fuels: 840-5669
Website: https://www.doe.gov.ph
_______
1 Asia-Pacific Weekly Recap 03 March 2023 by S&P Global Platts Analytics