Oil Monitor as of 13 December 2022

Date published: December 13, 2022

WORLD OIL PRICES (December 5-9,2022 trading days)

The week-on-week price of Dubai crude has decreased by almost $4.30/bbl. MOPS gasoline, diesel and kerosene have also decreased by about $4.40, $7.70, and $9.70 per barrel, respectively.

Reasons for the Price Adjustment1

  • Oil futures came under increased pressure this week, with Brent plunging by more than $10/bon week, as the market repriced supply risks in the wake of resilient Russian crude exports. The $60/b price cap on seaborne Russian crude oil set by the G7, EU and Australia came into effect Dec. 5, while Russia said the cap would destabilize global energy markets but would not affect its ability to sustain what it calls its “special military operation” in Ukraine.
    • Russia’s crude output reached an eight-month high of 9.87 million b/d last month, indicating large export availability. The OPEC+ alliance agreed Dec. 4 to stick to their October plan to cut output by 2 million b/d from November through 2023, adopting a wait-and-see approach amid market uncertainty.
  • On the demand side, U.S. services industry activity unexpectedly picked up in November, sparking speculation the US Federal Reserve may lift interest rates more than recently projected.
    • On the other hand, China’s accelerated shift toward reopening the economy is one silver lining that could give demand a boost in the coming months. The government Dec. 7 issued 10 new measures for dealing with COVID-19, including reducing the frequency and scale of mass testing, allowing home isolation for asymptomatic and mild COVID-19 cases and a ramp-up of vaccination for the elderly.
    • Several major cities including Beijing, Shanghai and Shenzhen now no longer require commuters to show negative COVID-19 tests to take public transport. S&P Global Commodity Insights expects more relaxed measures to be rolled out from now toward Q1 2023. We estimate total oil demand to contract by 205,000 b/d on year to average 15.7 million b/d in Q4, up 600,000 b/d vs. Q3, bringing 2022 annual demand to 14.96 million b/d.
  • Asian gasoline crack vs. Dubai eased on week as of Dec. 8 Asian close, tracking weakness in US RBOB-Brent rack on the back of a large weekly build in US gasoline stocks.
    • On the inventory front, US gasoline stocks rose for a fourth straight week by 5.32million barrels or 2.5% to a near four-month high of 219.09million barrels in the week ended Dec. 2, down 0.1% on year, EIA data showed, as demand for transportation fuels remained unseasonably low.
Demand in Asia indicated that Indonesia, Southeast Asia’s largest importer of gasoline, is expected to import 10-11 million barrels of gasoline in December ahead of New Year celebrations, higher than November estimate. Also, India’s refining company-HPCL was seeking prompt gasoline cargoes due to an issue with its RFCC. On the other hand, exports from China are expected to be strong in December despite recent loosening of COVID-19 restrictions.
  • Asian gasoil crack dropped on week as of Asian close on Dec. 8, as the M1/M2 backwardation flattened. Reports said that with plentiful export quotas and sufficient feedstock Chinese refiners lifted oil product exports to a 17-month high last month, higher by 46.5% from a low base a year earlier. Current trade flows data put China’s December gasoil outflows at about 0.9 million mt so far.

FOREX: The week-on-week average of Philippine peso appreciated versus the US dollar by P0.74 to P55.68 from P56.42 in previous week.

DOMESTIC OIL PRICES

Effective 13 December 2022, the oil companies implemented a per liter decrease in gasoline by P1.70, diesel by P3.40 and kerosene by P4.40.

These resulted to the year-to-date total adjustments to stand at a net increase of P13.25/liter for gasoline, P24.60/liter for diesel, and P19.15/liter for kerosene.

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

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