WORLD OIL PRICES (May 2-6, 2022 trading days)
Dubai crude has increased week-on-week by roughly US$4.30/bbl. MOPS gasoline and MOPS diesel prices have also increased by around US$11.50 and US$10.10 per barrel, respectively.
Reasons for the Price Adjustment1
- Crude prices started with a fall last week after rate hike indication from US Fed chairman and fear of further lockdowns in China after it started mass testing in some areas of Beijing, but prices started rising after China failed to impose a lockdown in Beijing and announced fresh stimulus measures. This week has been a very volatile for crude markets as the price rise as both bullish and bearish factors were at play.
o Crude prices faced headwinds in form of demand concerns from China with continued lockdowns and US commercial crude stocks climbed 1.3 million barrels to 415.73 million barrels in the week ended April 29 as per EIA data released on May 4.
o After a brief fall due to these headwinds however, crude prices started to rise again with the unveiling on 04 May of EU's sixth sanctions package against Russia which would, if approved by all members, ban crude imports within six months and halt flows of Russian oil products by the year-end.
- Also supporting price is the decision of OPEC+ to ignore calls from Western nations to hike output more
o Ignoring the calls, OPEC+ agreed to raise June production by 432,000 barrels per day, in line with its plan to unwind curbs made when the pandemic hammered demand.
o OPEC+ continues to view this as a problem of the West’s own making and not a fundamental supply issue that it should respond to. OPEC+ argues that the producer group could not be blamed for disruptions to Russian supply, saying further that China's coronavirus lockdowns threatened the outlook for demand.
- On the Asian market, gasoline rose $6.76/b on week to $31.53/b due to robust regional demand recovery and supply tightness. Robust demand is expected due to end of Ramadan festivities in Malaysia, Indonesia and Brunei. Demand boost for gasoline is also expected with the Thai government's relaxation of COVID-19 regulations.
o The Asian gasoline complex has also been also supported by strength in the US gasoline markets due to summer driving demand.
- Gasoil/diesel cracks rose on week by $6.18/b to $58.12/b after EU plans to phase out Russian crude oil imports within six months with Germany, Europe's biggest buyer of Russian oil, signaled its willingness to cope with a phased embargo on Russian crude and oil products; thus growing the expectations of increasing demand for Asian barrels to fill the gap.
o The rise was also supported on increased regional demand, thereby limiting the supply from some exporting nations.
FOREX: Philippine peso depreciated week-on-week against the US dollar by P0.11 to P52.39 from P52.29 in previous week.
DOMESTIC OIL PRICES
Effective 10 May 2022, the oil companies implemented a price increase in domestic oil products. Both Gasoline and diesel have increased by P4.20 per liter while kerosene has increased by P5.85 per liter.
These resulted to the year-to-date adjustments to stand at a net increase of P22.00/liter for gasoline, P34.50/liter for diesel and P29.75/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