WORLD OIL PRICES (October 16-20, 2023, trading days)
The week-on-week price of Dubai crude has increased by more than $3.80/bbl. Additionally, MOPS, gasoline, diesel and kerosene prices have also increased by around $2.20, $3.00 and $3.10 per barrel, respectively.
Reasons for the Price Adjustment1
- Crude prices moved higher amid a resurgence of uncertainty over further escalation of the conflict in Gaza, US stock draw and stronger-than-expected Chinese economic data.
- The bombing of a hospital in Gaza Oct. 17 added to worries that the war could spread. Jordan has cancelled a summit with Arab leaders and President Joe Biden scheduled for Oct. 18, while Iran has called for a boycott of oil exports from Muslim countries to Israel.
- US commercial crude stocks declined 4.49 million barrels to 419.75 million barrels in the week to Oct. 13, per US-EIA data. In Asia, reports also showed that China's crude throughput hit a record high in September after rising 1.6% from the previous high in August amid strong demand in the harvest and holiday season.
- The Asian gasoline complex softened as Mexican gasoline demand for Asian cargoes for November continued to be lackluster and market participants continued to expect China's exports to fall amid poor export margins.
- Some Asian cargoes were heard flowing to the Middle East amid heavy refinery turnarounds in that region, while supply within Asia was said to be balanced with a healthy flow of exports from South Korea. But exports from China for November and December will likely be curbed by limited export quota.
- For the Asian gasoil/diesel, lackluster winter heating demand from the West, coupled with firming freight rates, continued to cast a pall over the Asian gasoil market. But regional spot demand is lending some support to the complex with the emerging supply availability as well.
- Freight costs have been on a steady upward climb since early October.
- Meanwhile, South Korea will extend tax cuts on auto fuels through the end of December to help cushion consumers from rising international oil prices amid the war between Israel and militant group Hamas.
FOREX: The week-on-week average of Philippine peso appreciated versus the US dollar by P0.02 to P56.79 from P56.81 in previous week.
DOMESTIC OIL PRICES
Effective 24 October 2023, the oil companies implemented an increase of P0.95/liter for the price of gasoline, P1.30/liter for diesel and P1.25/liter for kerosene.
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1 Asia-Pacific Weekly Recap 20 October 2023 by S&P Global Commodity Insights.