WORLD OIL PRICES (November 20-24, 2023, trading days)
The week-on-week price of Dubai crude has increased by around $1.30/bbl. Similarly, MOPS gasoline, diesel and kerosene prices have also increased by nearly $0.45, $1.30, and $1.00 per barrel, respectively.
Reasons for the Price Adjustment1
- Oversupply concerns along with downgraded Japanese economic outlook and delayed OPEC ministerial meeting led to fall in crude prices in the week.
- Japan downgraded its economic outlook for the first time in 10 months, raising demand slowdown concerns in Asia. Japan's downgrade came as the Petroleum Association of Japan reported a 73.1% weekly fall in refinery run rates over Nov. 12-18.
- The recent weakness in global crude oil prices has bolstered expectations among market observers that Saudi Arabia and Russia could extend their additional voluntary cuts through at least the first quarter of 2024 in the upcoming OPEC+ meeting.
- A stronger dollar also pressured crude oil prices through the Asian session
- The Asian gasoline complex weakened amid expectations that China could increase gasoline exports going forward amid a buildup in domestic stocks.
- On the other hand, while US gasoline demand held firm ahead of Thanksgiving, the Philippines demand is also expected to pick up due to year end festivities.
- For gasoil/diesel, poor demand in Asia and unviable arbitrage economics dampening the product’s market sentiment.
- The Asian market remained range bound on soft regional demand and no incremental pull for cargoes from the west.
- Poor East-West arbitrage economics unable Asian gasoil barrels to make the move West despite low inventory levels.
FOREX: The week-on-week average of Philippine peso appreciated versus the US dollar by P0.44 to P55.45 from P55.89 in previous week.
DOMESTIC OIL PRICES
Effective 28 November 2023, the oil companies implemented price rollbacks for diesel, and kerosene by P0.30 and P0.65 per liter, respectively. No movement has been effected on the price of gasoline.
These said adjustments resulted in a year-to-date net increase of P6.00/liter for diesel and P1.74/liter for kerosene while gasoline remains at its net increase at P12.30/liter.
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1 Asia-Pacific Weekly Recap 24 November 2023 by S&P Global Commodity Insights.