WORLD OIL PRICES (January 13-17, 2020 trading days)
Dubai crude has decreased week-on-week by almost US$03.00 per barrel. Both MOPS gasoline and MOPS diesel have also decreased, gasoline by around US$2.75 per barrel and diesel by nearly US$5.10 per barrel.
Reasons for the Adjustment
Oil held its biggest gain in almost two weeks on optimism a more conciliatory approach on trade from the U.S. will help revive growth, but was still headed for a weekly drop amid persistent demand concerns.
- Futures in New York edged higher after closing up 1.2% Thursday. Washington and Beijing signed a phase-one trade deal on Wednesday, while the Senate passed the U.S.-Mexico-Canada free trade agreement a day later. A big jump in American oil-product stockpiles last week highlighted sluggish demand.
- China pledged $52.4 billion in additional purchases of American energy over 2020 and 2021 in the agreement, although there was some skepticism in the market about whether it would be able to reach the target.
- OPEC+ members will remain united in their stewardship of the oil market, whether or not their current production cuts are extended beyond their currently scheduled March expiry.
- OPEC, Russia and nine other countries are entering their fourth year of production cuts aimed at supporting oil prices, with the current deal that went into force January 1 calling on the coalition to slash 1.7 million b/d of output through March. Saudi Arabia has also pledged to cut a further 400,000 b/d if all other members respect their production quotas.
- The alliance will meet again March 5-6 in Vienna to decide on the future of the deal.
- The Asian gasoline market continued on a downward trajectory Friday due to healthy supply and weak demand as driving activity tapers off during winter. The oversupply situation in Asia was also seen in the Middle East.
- Downward pressure was maintained on the Asian gasoil market, as good supply levels weighed on fundamentals.
- Spot gasoil supplies were seen in abundance Thursday, maintaining downward pressure on the Asian market.
FOREX: Week-on-week value of Philippine Peso appreciated against the US dollar by P0.14 to P50.72 from P50.85 in the previous week.
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DOMESTIC OIL PRICES
Effective January 18-21,2020, most of the oil companies implemented a price decrease on petroleum products. The price of gasoline has decreased by P0.85-P0.90/liter, diesel by P1.70/liter and P1.60-P1.65/liter for kerosene.
Year-to-date adjustments stand at a net decrease of P0.95/liter for gasoline, P1.50/liter for diesel and P1.64/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
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