WORLD OIL PRICES (February 14-18, 2022 trading days)
Dubai crude has increased week-on-week by around US$ 1.80/bbl. MOPS gasoline and MOPS diesel have both increased by approximately US$2.30 per barrel and about US$ 1.60 per barrel.
Reasons for the Price Adjustment1
- Crude oil extended increases on tighter supply outlook despite easing of geopolitical tensions on Russia-Ukraine border and a potential return of Iranian barrels to oil market. Crude prices rallied by about $4/b earlier this week, on the prospects of a Russian invasion of Ukraine before dipping later in the week as Russia released a footage showing withdrawal of some troops from the border. This eased concerns, for the time being.
o Despite the growing optimism over Iranian nuclear deal, the supply outlook remains tight. The International Energy Agency (IEA), in its latest report raised its 2022 demand outlook to 100.6 million b/d from prior estimate of 99.7 million b/d while supply from OPEC+ remains tight. Spare capacity continues to shrink on years of under investment as seen in the persistent gap between OPEC+ output and targeted allocations.
- Increasing driving activity in key consumer countries is keeping the Asian gasoline market afloat. In India, the mobility index has continued to rise as travel and employment restrictions have been eased, as well as campaigning for election rallies. The driving index in India was 232.56 points above baseline, up 7% week on week, while it was 132.68 and 149.12 points above baseline in Australia and Japan, respectively.
o However, the driving index declined in Indonesia, Malaysia, and Vietnam as a result of high COVID infections, and as increased retail expenses curtailed some retail demand.
- The Asian gasoil complex is holding up well, since supply is tight and demand is steady. Shortages of product in the East keep the arbitrage profitable, but supply constraints are limiting arbitrage2 flows, as evidenced by the narrowing of the Exchange Future Swaps3 (EFS), which shrank by $2.38/mt on the week to minus $23.75/mt at the Asian close on Feb. 17. The EFS was also pulled down by the resumption of oil product flows from Russian refineries as the weather situation improved.
FOREX: Philippine peso appreciated week-on-week against the US dollar by P0.01 to P51.33 from P51.34 in previous week.
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
DOMESTIC OIL PRICES
Effective 22 February 2022, the oil companies implemented a price increase in domestic oil products. Gasoline has increased by P0.80 per liter, diesel by P0.65 per liter, while kerosene has risen by P0.45 per liter.
These resulted to the year-to-date adjustments to stand at a total net increase of P8.75/liter for gasoline, P10.85/liter for diesel and P9.55/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.
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
2 Arbitrage is the simultaneous purchase and sale of the same asset in different markets in order to profit from tiny differences in the asset's listed price.
3 Is a transaction negotiated privately in which a futures contract for a physical item is exchanged for a cash settled swap contract.