WORLD OIL PRICES (October 10-14, 2022 trading days)
The week-on-week price of Dubai crude has increased by more than $2.00/bbl. MOPS gasoline has also increased by around $1.50 per barrel as well as MOPS diesel and kerosene by nearly $5.60 and $6.40 per barrel, respectively.
Reasons for the Price Adjustment1
- Oil prices were on a volatile ride this week after retreating from a more than one-month high hit on October 7 as the market refocused on demand concerns amid global recession risks. This week’s Labor Department data showed US consumer and producer prices both climbed more than expected in September. Inflationary pressure is foreseen to keep the US Federal Reserve on its aggressive tightening path and raise interest rates even more aggressively despite a slowdown in US economic growth.
o On October 12, OPEC reduced its oil demand forecasts for 2022 and 2023, days after the OPEC+ announced a 2 million b/d cut in its output quotas from November. The US EIA also reduced its forecast for 2023 global oil consumption by 500,000 b/d to 101.03 million b/d, citing lower GDP growth.
o The International Monetary Fund lowered its forecast for 2023 global GDP growth to 2.7%, down 0.2 percentage point from its July forecast, noting that Russia's war on Ukraine continues to destabilize the global economy, while it has led to a severe energy crisis in Europe that is sharply increasing costs of living and hampering economic activity.
- On the supply side, an oil leak was detected on one of the two lines of the Western section of Russia’s Druzhba pipeline, which supplies crude oil to Germany. Platts said, the affected pipeline is part of the system that delivers Russian Urals crude to Germany’s Schwedt and Leuna refineries via Poland. The 230,000 b/d Schwedt refinery, which supplies about 90% of Berlin’s fuel needs was still receiving oil deliveries from the Druzhba pipeline but at reduced capacity.
- For gasoline in Asia, cracks fluctuated between positive and negative territory, while Chinese exports are expected to rise in the Q4 following the release of fresh product export quotas. However, the recent weakness in gasoline export margins may reportedly cap the volume and lead Chinese refiners to increase gasoil and jet fuel exports instead.
- Asian gasoil/diesel cracks strengthened on tight global inventories and lucrative East-West arbitrage economics on the back of a deeply negative exchange of futures for swaps (EFS)2 as refinery worker strikes in France entered a third week and drove further supply tightness in the European market.
FOREX: The week-on-week average of Philippine peso depreciated versus the US dollar by P0.19 to P58.96 from P58.77 in previous week.
DOMESTIC OIL PRICES
Effective 18 October 2022, the oil companies implemented a per liter increase in gasoline by P0.80, diesel by P2.70 and P2.90 for kerosene.
These resulted to the year-to-date total adjustments to stand at a net increase of P16.45/liter for gasoline, P38.50/liter for diesel, and P29.65/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
2 EFS is a transaction negotiated privately in which a futures contract for a physical item is exchanged for a cash settled swap contract