WORLD OIL PRICES (January 2-6, 2023 trading days)
The week-on-week price of Dubai crude has decreased by around $2.00/bbl. MOPS gasoline, diesel and kerosene have also decreased by about $2.30, $7.30 and $6.80 per barrel, respectively.
Reasons for the Price Adjustment1
- Crude oil futures were pressured during the week as resurgent fears of a global economic slowdown and a faltering recovery in China’s oil demand sent investors fleeing from risk assets.
o The IMF head warned that one-third of the global economy will be in recession this year, while China is facing a difficult start to the new year of 2023 as it grapples with a worsening COVID-19 outbreak that has overwhelmed the national healthcare system.
o Some experts though estimated that daily COVID-19 cases in China may have already peaked in parts of the country, including Beijing. The Chinese government is said to officially scrap centralized quarantine and COVID-19 tests effective Jan.8. Inbound travelers will only need to present a negative PCR test result from the previous 48 hours to enter the country.
- However, a disruption to Russian crude supply resulting from sanctions and the price cap is expected to remain a supporting factor for oil prices.
- Asian gasoline crack saw a minor dip as Singapore gasoline complex turned bearish following the release of new Chinese export quotas and nine-month high gasoline inventories on US Atlantic Coast.
o Market is expecting steady gasoline exports from China on the back of newly issued quotas and high gasoline inventories as the country’s demand recovery remains uncertain after increased COVID-19 infections.
o Although, Lunar New Year demand in China can be a game changer in January as relaxed restrictions might spur domestic demand recovery.
- After the increase last week, the Asian gasoil/diesel crack slumped in week ending Jan. 5 in anticipation of steady regional supply from China.
o The recent trade flow data showed China’s December outflows at about 2.2 million mt a bit lower than 2.5 million mt in November.
o China's first batch of clean product quotas for 2023 at 18.99 million mt for exporting gasoline, gasoil and jet fuel are higher by 46% from 13 million mt issued in the same batch for 2022, with Sinopec as the top quota holder.
o Singapore reverted to being a net exporter of gasoil in the week ended Jan. 4 with outflows of 276,942 mt, outpacing inflows of 142,456 mt by almost double, per the Enterprise Singapore data. Brazil, Australia and Malaysia were the top destinations for Singapore's gasoil exports over Dec. 29-Jan. 4, Platts further noted.
FOREX: The week-on-week average of Philippine peso depreciated versus the US dollar by P0.06 to P55.83 from P55.78 in previous week.
DOMESTIC OIL PRICES
Effective 10 January 2023, the oil companies implemented the second adjustment for the year 2023: decrease in gasoline by P0.75/liter, diesel by P2.80/liter and kerosene by P2.10/liter.
These resulted to total adjustments this year to stand at net increase of P2.15/liter for gasoline, and P0.95/liter for kerosene; diesel at net decrease of P0.70/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
SMS: (0915) 4469421
Email: oilmonitor@doe.gov.ph
Website: https://www.doe.gov.ph
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1 Asia Pacific Weekly Recap by S & P Global Platts Analytics