WORLD OIL PRICES (October 31-November 4, 2022 trading days)
The week-on-week price of Dubai crude has decreased by around $0.20/bbl. MOPS diesel and kerosene have also decreased by nearly $1.20 and $0.90 per barrel, respectively. On the contrary, MOPS gasoline has increased by about $2.70 per barrel.
Reasons for the Price Adjustment1
- Oil prices retreated despite a weekly draw in US crude inventories, as concerns over more interest rate hikes by the US Federal Reserve stroke fears of economic slowdown and dampened market sentiment. The Fed on Nov. 2 raised interest rates for the fourth time in a row by 75 bps, in line with market expectations, but Fed Chairman Powell cautioned in his post-FOMC press conference that the ultimate level of the terminal rate may be higher than previously expected.
- The Chinese government has continued to double down on its COVID-19 restrictions under President Xi Jinping’s dynamic Zero-COVID policy. The authorities on November 2 imposed a seven-day lockdown in the area surrounding the world’s largest iPhone factory in the city of Zhengzhou to curb a COVID-19 outbreak.
o On Oct. 28, authorities in Shanghai ordered 1.3 million residents of its downtown Yangpu district to undergo mass testing, confining them to their homes at least until results are known.
- On the upside, the OPEC forecast world oil demand to increase around 0.3 million b/d in 2023 when the remaining parts of the demand loss due to COVID-19 pandemic curbs recover, particularly in the aviation sector.
- US commercial crude stocks fell by 3.12 million barrels to 436.83 million barrels in the week to Oct. 28, the EIA data showed. SPR stockpiles extended declines by 1.93 million barrels to 399.79 million barrels over the same period.
- Asian gasoline crack vs. Dubai rose during the week, tracking a rebound in US RBOB-Brent crack over the past two days on the back of a 1.26-million-barrel weekly draw in US gasoline stocks. Asian gasoline cracks have averaged $2.54 to date in November, compared with $0.12/b in October and $2.87/b in September.
- Asian gasoil crack retreated amid weakening East-West arbitrage economics as the impact of month-long strike actions at French refineries subsided. Meanwhile, supply in the region is expected to rise as refiners in India gradually complete turnarounds. However, South Korea’s top oil refiner SK Innovation plans to carry out major maintenance works in Q4, thus, crude run rates could be lowered to around 80% in Q4, compared with 85% in Q3.
o Singapore’s onshore commercial stockpiles of middle distillates fell by 1.2% on week to 6.81 million barrels over Oct. 27-Nov. 2, down 29.1% of year ago level per Enterprise Singapore data. Singapore remained a net exporter of gasoil over the week, with Australia being the top destination for gasoil outflows, at 104,877 mt, followed by Malaysia at 102,170 mt and Indonesia at 67,617 mt.
FOREX: The week-on-week average of Philippine peso appreciated versus the US dollar by P0.02 to P58.50 from P58.52 in previous week.
DOMESTIC OIL PRICES
Effective 08 November 2022, the oil companies implemented a per liter increase in gasoline by P1.40 and decrease in diesel by P0.50 and kerosene by P0.35.
These resulted to the year-to-date total adjustments to stand at a net increase of P17.25/liter for gasoline, P36.30/liter for diesel, and P28.60/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
_______
1 Asia Pacific Weekly Recap by S & P Global Platts Analytics