WORLD OIL PRICES (May 9-13,2022 trading days)
Dubai crude dropped by about $1.70/bbl week on week. MOPS gasoline and MOPS diesel prices have also fallen by about $2.00 and $8.50 per barrel, respectively.
Reasons for the Price Adjustment1
- Global financial markets have been alarmed by concerns over recession worries dampening oil demand, as tighter and wider Covid-19 lockdowns in China led to slower export growth in the world’s second largest economy in April.
o Their crude imports in the first four months of 2022 fell 4.8% from a year ago, but April imports were up nearly 7%.
- Crude prices remained volatile this week amid a mixed fundamental picture and increasing hedging ratios in the financial sector. Hurdles in implementing Russian oil ban by EU member countries have contributed to steep decline of crude oil prices at the beginning of the week, on top of recession fears and demand losses in China. This is despite that G7 (the group of 7 countries which consist of France, Canada, Germany, Italy, Japan, Britain and the United States) has pledged to phase out Russia oil imports without specific timelines.
- Asian gasoline market remained strong with gasoline cracks staying at nearly $30/b on average during the week despite moderating by $1.68/b on week to $29.85/b on May 12 Asian close. The strength is largely driven by summer driving demand in Asia as well as post-Ramadan festivities in Malaysia and Indonesia. In addition, gasoline demand in majority of Asian Countries continued to normalize on loosening COVID-19 restrictions.
o In Vietnam, gasoline demand increases substantially due to increased factory operations migrated from China. Gasoline demand from Thailand and Cambodia is also expected to increase due to more intercountry travel following the reopening of the Chong Chom border on May 6. Meanwhile, Laos relaxed COVID-19 entry requirements for fully vaccinated travelers on May 9.
- On the supply side, Asia gasoline complex has also been supported by the expectations that China will keep reducing gasoline exports on year at least by June due to lack of export quotas.
- Asian gasoil/diesel balance remained tight during the week although gasoil cracks moderated on week by $10.86/b to $47.26/b on May 12 close due to less attractive arbitrage opportunity to the West. Regardless, gasoil demand in Asia remains healthy. Commodity Insights Analytics expects Asia gasoil demand to grow by 295,000 b/d in 2022 on the back of planned stimulus packages widely seen among majority of Asian countries except China where gasoil oil demand will shrink by 0.7% due to ripple effect of COVID lockdowns.
FOREX: Philippine peso appreciated week-on-week against the US dollar by P0.02 to P52.37 from P52.39 in previous week.
DOMESTIC OIL PRICES
Effective 17 May 2022, the oil companies implemented a price decrease in domestic oil products. Gasoline has decreased by P0.40 per liter, diesel by P3.00 -P3.10 per liter and kerosene by P2.10 per liter.
These resulted to the year-to-date adjustments to stand at a net increase of P21.60/liter for gasoline, P31.40/liter for diesel and P27.65/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