WORLD OIL PRICES (October 6-10, 2014 trading days)

Crude oil prices continued their downtrend, hitting its 33-month low this week, as signs of weak demand
for petroleum and ample supply continued to push prices toward multi-month lows. The price slide is also
accounted to the following:

A. Concerns about global economic growth

• Exports from Germany reportedly fell 5.8 percent in August, the worst decline since January 2009; a string of dismal data from Germany, the engine of the euro zone economy, raised fears that a recession at the heart of Europe could slow down the global economy;
• Growing fear that the U.S. economy cannot escape unscathed when Europe is stalling and many other big economies, including China, Japan and Brazil, face their own hardships;
• Chinese economy is also slowing down.

B. Mounting stockpiles

• US petroleum inventory report ending October 3 showed mounting stockpiles, the lowest level
• since mid-April 2013;
• US-DOE reported soaring crude reserves of 5.0 million barrels in the week ending October 3, much above the 1.9 million billion forecast by analysts surveyed by Dow Jones Newswires.

C. Lower demand, abundant supply and reduced economic growth forecasts

• US-EIA lowered its global oil demand forecast for 2014 and 2015
• International Monetary Fund cut its projection for world economic growth this year and next, and warned of stagnation in developed economies.
• Crude market awash with supplies.

Meanwhile for the products market in Asia, Platts noted that Asian gasoline market continued to be buoyed by tight prompt supply, though demand was remained steady in the region. A softer Western market was also adding to the pressure, it added.

On the other hand, weak sentiment in the Asian gasoil/diesel market reportedly continued, with some pointing to slowing regional economies, particularly China. Yet some market observers felt the weakness was more due to the abundance of supply.

Overall, Dubai crude decreased week-on-week by about US$3/bbl. MOPS diesel and gasoline decreased as well by about US$3/bbl and US$4/bbl, respectively.

FOREX: Peso per US dollar rate appreciated week-on-week by P0.16 to P44.71, from P44.87 in the preceding week.

Other recommended reference sites:
(1) http://www.aip.com.au/pricing (2) http://www.med.govt.nz/ers/oil_pet/prices/prices.html

DOMESTIC OIL PRICES

Effective 12 October 2014, most of the oil companies implemented a decrease of P1.55/liter for diesel, P1.20/liter for gasoline and P1.60/liter for kerosene.

Year-to-date total adjustment for diesel and gasoline now stands at a net decrease of P6.38/liter and P3.75/liter, respectively. LPG, with one increase so far this year, has a total net decrease of P20.32/kg.

* RON 95

For more information, call the

Department of Energy:
Pricing: 840-2187
LPG: 840-2130
Fuels: 840-5669
SMS: (0915) 4469421
Email: [email protected]
Website: http://www.doe.gov.ph