WORLD OIL PRICES (September 18-22, 2023, trading days)
The week-on-week price of Dubai crude has increased by around $0.90/bbl. On the contrary, MOPS gasoline, diesel and kerosene have decreased by about $1.20/bbl, $1.50/bbl, and $1.80/bbl, respectively.
Reasons for the Price Adjustment1
- Oil price edged slightly lower this week as the market balanced tight global supply against macroeconomic headwinds that would trim forward demand growth.
- Global oil demand outlook came under pressure after the US Federal Reserve signaled late Sept. 20 that it would maintain its aggressive monetary policy stance into 2024. The bank’s Summary of Economic Projections forecasts at least one further interest rate hike in 2023. A stronger US dollar, in the wake of the Fed announcement, added further pressure to crude prices.
- Expectations of a substantial supply deficit though the end of the year kept prices supported. OPEC’s latest forecast is for global oil demand to outstrip supply by more than 3 million b/d in the fourth quarter of 2023, with oil prices seeing a significant rise in recent months. OPEC+ producers have not yet indicated any adjustment to current quotas despite these two factors.
- Asian gasoline crack fell as US RBOB-Brent spread softened despite that total US gasoline stocks fell in the week ended Sept. 15. US gasoline is expected to soften into the winter season.
- China’s gasoline exports are expected to ease in September from August’s high volume due to the upcoming holiday season.
- Asian gasoil/diesel crack fell while Russia’s surprise temporary ban on exports of diesel and gasoline could tighten global supply ahead of the peak winter diesel demand season in the Northern Hemisphere.
- Russia has introduced a temporary ban on exports of diesel and gasoline to stabilize prices in the domestic market by helping to increase supply ahead of the peak winter diesel demand season.
FOREX: The week-on-week average of Philippine peso depreciated versus the US dollar by P0.11 to P56.82 from P56.71 in previous week.
DOMESTIC OIL PRICES
Effective 26 September 2023, the oil companies implemented a decrease of P0.20/liter for gasoline and diesel, and P0.50/liter kerosene.
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1 Asia-Pacific Weekly Recap 22 September 2023 by S&P Global Commodity Insights.