Oil Monitor as of July 19, 2016


WORLD OIL PRICES (July 11-15, 2016 trading days)

Oil prices initially dropped on the start of the week on worries about global oil supply and stronger US dollars. Additional factors that contributes to the price fall is the rising of U.S oil drilling rig counts and bullish hedge on crude to four- months lows.

The price of crude oil however rose again by more than two dollars on Tuesday, July 12, behind reports of weakening U.S. dollar and the bullish OPEC report. The report said that the total output from all 14 members rose 264,000 barrels to roughly 32.9 million barrels a day last month. Although it is above the average monthly demand of 31.9 million, OPEC expects demand for the cartel's oil to increase to 33 million barrels a day next year. The report also said that non-OPEC supply is projected to decline by 900,000 barrels to 56 million a day in 2016. Further, non-OPEC supply is projected to fall another 100,000 barrels to 55.9 million a day in 2017.

Additional fall of oil prices was again felt last Wednesday, July 13, by more than 4 percent after the US government stunned the market with a raft of bearish inventory data, which added to the concerns over a global glut of oil. The US inventory report put pressure on prices in a market already bearish after the International Energy Agency (IEA) warned about a global oil glut.

The U.S. Energy Information Administration (EIA) reported that supply levels stood at 526.6 million barrels, lower by 2.6% from 540.6 million roughly two months ago. This steep decline in inventory is largely due to the falling number of active oil rigs, which is down from 645 to 351 over the last 12 months.

Then again Thursday (July 14) which seems to be a seasaw of oil prices climbed again as weaker U.S. dollar improved investor sentiment, which made the dollar-denominated oil more attractive for holders of other currencies.

In Platts Friday news, industry sources said gasoline supply and demand fundamentals in the Asia Pacific are expected to look increasingly more balanced in the near term. Although spot supply is currently ample with China continuing to push out additional cargoes of gasoline, the expected fall in overall Asian production of the automotive fuel will temper the supply glut.

As for Asian gasoil, requirements continued to hamper due to heavy rains and a fishing ban in China, and the monsoons in India.

The overall bearish outlook exerted downward pressure on fresh spot trades, translating to lower prices.

Overall, Dubai crude decreased week-on-week by US$1.92/bbl. MOPS gasoline and diesel decreased as well by about US$2.36 and US$2.70 per barrel, respectively.

FOREX: The peso per US dollar rate appreciated by P0.19 to P47.16/US$ from P46.97 in previous week.

Other recommended reference site: http://www.aip.com.au/pricing


 

DOMESTIC OIL PRICES

Effective today, 19 July, the oil companies implemented a price reductions in gasoline by P0.55/liter and P0.75/liter in diesel and kerosene.

This brings year-to-date adjustments to net increases of P1.04/liter and P4.63/liter for gasoline and diesel, respectively.

 

 

As monitored, shown below are the retail prices in Metro Manila beginning July 19, 2016.

Products Price Range Common Price Resulting Pump Price Based on Announced Adj.
P/liter
Diesel 24.70-28.1 27.15 34.89
Gasoline* 34.25-41.30 39.20 50.08
LPG, P/11-kg cylinders 400.00-640.00    

* RON 95

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: http://www.doe.gov.ph

Oil Monitor as of July 12, 2016


WORLD OIL PRICES (July 4-8, 2016 trading days)

Dubai crude prices rose Monday by almost a dollar on weaker dollar that lent support to the commodity and amid subsiding fears about the Brexit referendum’s impact on crude demand. Gains were somehow limited as the US dollar recovered over the week, and as many analysts stressed that Britain’s economy is too small for an economic slowdown that could cut oil demand growth substantially.

The following are reasons which analysts mentioned to have dominant impact to the oil market over the week:

  • Increased rig count.Oilfield services provider Baker Hughes indicated that the US oil rig count increased by 11 to 341 in the week ending July 1, the biggest rise over that five-week period, raising the possibility that more drilling activity could eventually lead to greater output.

  • Indications of economic slowdown.Crude imports to Asia over the last few months are falling although volumes were still high over the last year as some economies took advantage of low oil prices. Specific signs of economic slowdown in Asia include Japan, where government data showed that core machinery orders unexpectedly fell 1.4 percent in May from the previous month, down for a second straight month. Another major oil consumer-China, where consumer inflation in June held below the official target of around 3 percent for this year, indicating the country’s weak demand.

  • Higher than expected US inventories. Inventory data from the Energy Information Administration showed that U.S. crude and gasoline supplies fell less than expected for the week ending July 1. Crude oil inventories fell less-than-expected due to the rise in US crude oil imports and reduced refinery demand during the week.

However, the report of strong US non-manufacturing economic data and fresh attacks on Nigeria’s oil infrastructure just weeks after a reported cease-fire between the government and leftist groups provided some uptick on oil prices. Nigerian oil workers, i.e. Pengassan reportedly withdraw from oil fields and loading terminals to join with their leaders in protest against the Nigerian government.

In regional front, Platts noted that the Asia-Pacific gasoline market remained weak Friday, as a deluge of barrels pressured prices lower. Demand in the region remains largely stable compared to previous months, but oversupply of gasoline remained persistent due to an increase in exports from China. The glut in gasoline supply has kept the channel to move cargoes from North Asia to the US open, e.g. cargoes likely originated from South Korea headed to the US West Coast. Moreover, decreased throughput of refineries may leave the gasoline market relatively balanced.

For Asian gasoil/diesel, the market was largely steady as of Friday on the back of unchanged fundamentals. Platts observed a limited availability of spot barrels for 500 ppm sulfur gasoil, especially for prompt loading, which continued to buoy market sentiment. Market observers however, noted that the strength witnessed could potentially be short-lived when more supplies re-emerge from August. Thus, spot market availability is likely to remain tight for the rest of July with a relatively stable demand and occasional pick-up.

Overall, Dubai crude decreased week-on-week by almost US$0.90/bbl. MOPS gasoline and diesel decreased as well by about US$2.70 and US$0.20 per barrel, respectively.

FOREX: The peso per US dollar rate appreciated by P0.05 to P46.97/US$ from P47.01 in previous week.

Other recommended reference site: http://www.aip.com.au/pricing

DOMESTIC OIL PRICES

Effective 12 July 2016, most local oil companies implemented a price rollback in gasoline by P0.80/liter while others effected P0.90/liter. There was no movement in the prices of diesel and kerosene.

Currently, the year-to-date total adjustment for gasoline is net increase of P1.87/li. Diesel remains at net increase of P5.40/liter and LPG at net decrease of P7.80 / kg.

* RON 95

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: http://www.doe.gov.ph

As monitored, shown below are the retail prices in Metro Manila beginning July 12, 2016.

Products Price Range Common Price
P/liter
Diesel 25.45-28.75 27.95
Gasoline* 35.85-42.45 39.75
LPG, P/11-kg cylinders 400.00-640.00  

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