WORLD OIL PRICES (March 14-18,2022 trading days trading days)
Dubai crude has decreased week-on-week by about US$ 16.40/bbl. MOPS gasoline and MOPS diesel have both decreased by about US$17.20 per barrel and US$ 32.00 per barrel, respectively.
Reasons for the Price Adjustment1
- Crude oil prices fell earlier this week as in the wake of potential demand destruction in Asia and positive signs of Iran nuclear deal as well as Russia-Ukraine peace talk.
o On the demand side, tightened restrictions on movement across 20 provinces in China will likely trigger a demand destruction of 650,000 b/d in March and 400,000 b/d in April. In India, persistently high oil prices are anticipated to exacerbate inflationary pressures and stifle a nascent demand recovery, particularly after the elections in March, when retail prices are predicted to rise. The Fukushima earthquake in Japan has forced the closure of a dozen power plants, as well as the Sendai refinery in the region and the Chiba refinery in Tokyo Bay.
o On the supply front, Russia’s foreign minister met his Iranian counterpart on March 15 and appeared satisfied with “written guarantees” from the US while Iran released two British prisoners on the following day.
o Iran’s missile attack in Iraqi Kurdistan on March 13 appears directly linked to a recent Israeli attack on Iranian forces in Syria, so it is unlikely to affect nuclear talks with the US.
o S&P Global Commodity Insights Analytics expect an Iran nuclear deal would trigger 1.05 million b/d of export growth by August (including exports from storage), and an additional 400,000 b/d by mid-2023. Talks are also underway over paths to oil sanctions relief for Venezuela, but bipartisan political opposition in the US makes this even more difficult to achieve than an Iran deal.
- Asia gasoline market strengthened this week amid improved demand on loosened COVID restrictions in ex-China region and tightened supply.
o Demand recovery is evidenced by the improved mobility metrics among majority Asian countries. As such, Asian gasoline cracks increased by 62 cents/b on week to $18.89/b on March 17 Asian close.
o On the supply front, market expectations that China will likely suspend gasoline and gasoil exports in April have contributed to tighten the gasoline market. Yet the tightness seems moderated this week with backwardation in front month gasoline swap dropping by 82 cents/b on week to $4.50/b on March 17 Asian close.
- Asian gasoil cracks and structure continued significant fluctuations this week on the back of firm demand and supply uncertainties after declining from their historic highs recorded a week ago.
o On the demand side, gasoil fundamentals are expected to improve as pandemic-related limitations are eased, as most nations take an endemic approach and keep their borders open despite the spread.
FOREX: Philippine peso depreciated week-on-week against the US dollar by P0.14 to P52.32 from P52.18 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 March 2022, the oil companies implemented a price decrease in domestic oil products. Gasoline has decreased by P5.45-P5.50 per liter, diesel by P11.45-P11.50 per liter, while kerosene by P8.55 per liter.
These resulted to the year-to-date adjustments to stand at a net increase of P14.90/liter for gasoline, P19.20/liter for diesel and P16.35/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