Oil Monitor as of October 04, 2016


 

WORLD OIL PRICES (September 26-30, 2016 trading days)

Dubai crude initially dropped on Monday and went up and down in the next two trading as the two rival producers, Saudi Arabia and Iran, cast signs of a long way from an agreement on a mechanism for freezing production in a meeting later in the week. Saudi Arabia’s energy minister also says an agreement to limit output could come in the OPEC meeting in November.

However, despite reports that Iran had rejected overtures from its regional rival Saudi Arabia, an informal meeting of oil ministers from the 14 OPEC countries reportedly ended with a "preliminary deal to limit production". Qatar's energy minister and current OPEC president Mohammed Bin Saleh Al-Sada was quoted that the group agreed to limit output to between 32.5 million and 33 million barrels a day.

Following the preliminary deal, international oil price benchmarks Brent, WTI and Dubai surged more than five per cent or US$2.00-US$3.00 a barrel. Other oil ministers of OPEC member-countries said it was a "very positive deal", and the decision "was unanimous and without reservations".

The OPEC deal to limit production between 32.5 million and 33 million barrels a day is only a provisional agreement and needs to be finalised in November, when it will be decided which member will make the cuts necessary to meet the promised 700,000 per barrels reduction and by how much. Experts say output allocation may not be easy as Iran, Iraq, Libya, Nigeria have been looking to increase production.

Further, international analysts viewed the collective output cut to have little impact on a fundamental level, considering the underwhelming demand growth and remaining huge overhang of production from the glut of the past two years.

In Asia, gasoline market remained supported by an ongoing unconfirmed shutdown at Shell Singapore's Pulau Bukom refinery. On the demand side, Asia's biggest gasoline importer, Indonesia's state-controlled Pertamina, is estimated to have a monthly gasoline requirement of between 1 million barrels and 2 million.

On the other hand, market participants held mixed views on the near-term outlook for the Asian gasoil market. Platts noted that demand from China and India are expected to gain momentum in the weeks to come, which would translate to lower outflows from India. In contrast, others continued to maintain a bearish view on the gasoil market, due to prevailing supply overhang when North Asian refineries return from scheduled maintenance.

Overall, Dubai crude increased wee-on-week by about US$0.60/bbl. Gasoline and diesel increased as well by nearly US$0.40 and US$1.15 a barrel.

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DOMESTIC OIL PRICES

Effective 04 October 2016, oil companies effected increases of P0.35/li for gasoline and P0.60/li for diesel.

These resulted to corresponding increases in the total year-to-date adjustments of gasoline and diesel to net increase of P3.74/liter and P5.48/liter respectively.

As monitored, shown below are the retail prices in Metro Manila beginning 04 October 2016.

Products Price Range Common Price
P/liter
Diesel 25.58-28.60 27.10
Gasoline* 36.95-44.25 41.95
LPG, P/11-kg cylinders 427.00-632.00  

* 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 September 27, 2016


WORLD OIL PRICES (19-23 September 2016 trading days)

Over the trading week, analysts aver that while oil prices were recovering, the same are still weak due to mixed reports affecting the market, especially as the traders speculate the outcome of big oil producers meeting in Algeria this week.  However, the head of Gulf giant Saudi Aramco warned that market volatility could persist in the near future.

Market reports on the following have mainly driven the world oil market:

  • Crude Production and Inventory

    • Saudi crude exports rose in July to 7.62 million b/day from 7.46 million b/day in June.

    • Russia achieved record highs of above 11 million barrels per day output in August.

    • Oil workers' strike in Norway threatened to cut North Sea crude output, supporting the price up-tick.

    • U.S. crude stockpiles had a surprise drop in the week ending 16 September, boosting the demand outlook in the US. Adding support is the forecast by PIRA Energy Group forecastsof further 2.85 million barrels drop next week.

  • Geopolitical turmoil

    • Clashes in Libya temporarily halted loading of the first oil cargo from key pipeline.

  • Oil producers meeting in Algeria.

    • Venezuelan President Nicolas Maduro remarked that OPEC and other major oil producers were close to reaching a deal on price stability. But the market is skeptical of OPEC's commitment to an output freeze, particularly key members (Saudi, Russia and Iran) who were boosting exports while talking of a production deal.

    • Analysts doubt that agreement to limit output levels of oil producers meeting in Algeria, but pressure is growing to seal a deal this year that would help stabilize crude prices.

As regards the Asian market, Platts reported that tight supply of gasoline and scheduled refinery maintenance in China and India kept prices of gasoline higher.  But prices weakened on Friday after the Colonial successfully restarted the biggest gasoline pipeline that supplies eastern US markets.  Meanwhile, gasoil market remained low, saddled by weak fundamentals. Vietnam was heard to have bought three cargoes of 500 ppm sulfur gasoil. Despite the slight uptick seen in demand, market sources reiterated that the supply glut has remained in focus, weighing on sentiment.

Overall, Dubai crude increased week-on-week by US$0.04/bbl.  Similarly, MOPS gasoline and diesel increased by US$0.31 and US$0.42 per barrel, respectively.

FOREX: Philippine peso depreciated against the US dollar by P0.29 to P47.85/US$, from P47.57 last week.

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DOMESTIC OIL PRICES

Effective 27 September 2016, oil companies implemented a P0.25/liter increase in gasoline and diesel.  Kerosene also increased by P0.20-P0.30 per liter. The price freeze for kerosene lapsed after 15 days of implementation.

These brought a corresponding increase in the year-to-date adjustments in gasoline and diesel to a net increase of P3.39/liter and P4.88/liter, respectively.

As monitored, shown below are the retail prices in Metro Manila beginning 27 September 2016.

Products Price Range Common Price
P/liter
Diesel 24.65-28.02 27.40
Gasoline* 34.75-43.45 41.75
LPG, P/11-kg cylinders 395.00-600.00  

* 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

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