WORLD OIL PRICES (November 3-7, 2014 trading days)

Dubai price along with other crude benchmarks reversed from previous week’s marginal increases, dipping to its four year low of US$78/bbl, primarily due to the following events in the international market.

• Saudi cut crude prices to US. The top producer Saudi Arabia cut its prices for crude sold to the US market, which analysts interpreted the move as an effort to maintain market share as it faces competition from cheaper oil from US shale fields.
• Rebounding dollar and plentiful supplies. The dollar rallied after Republicans cruised to victory in US midterm elections, dealing a blow to President Barack Obama and his fellow Democrats. The oil market tends to fall on the back of the stronger greenback, because it makes dollar-denominated crude more expensive for buyers using weaker currencies.
  • The euro fell to more than two-year low versus the dollar. European Central Bank chief Mario Draghi said policy makers are unanimous in their commitment to expand stimulus if needed, to counter the threat of deflation in the ailing 18-country eurozone. He signaled officials may cut growth forecasts next month.

Other reports balancing the oil market follows:

• Increase in US crude Inventories. The data disclosed was when refineries operated at 88.4 per cent of their capacity, compared with 86.6 per cent the prior week, suggesting more demand for oil in the world's biggest economy.
  • US crude inventories grew by 500,000 barrels in the week ending October 31, much fewer than the 2.2 million barrels expected by analysts;
  • Gasoline stockpiles dipped by 1.4 million barrels, topping forecasts of a drop of 300,000 barrels.

Looking forward, analysts believe that in the absence of any negative geopolitical events, crude oil prices are likely to continue to remain soft until end of this year. OPEC Secretary-General Abdullah Al Badri said they are concerned but they are not panicking. The group is evaluating the situation to gauge how events might develop, and will have the ministerial meeting on November 27.

With regards to the product’s market in Asia, spot buying appetite continued to be seen in the Asian gasoline market as of Friday, with Indonesia seeking prompt cargoes for November and December loading. Demand for the product from other parts of Asia remains steady while supplies are relatively limited amid refinery shutdowns in the region Platts further noted. Stocks of light distillates in Singapore -- which include gasoline, reformate and naphtha -- fell almost 1% week on week during the week ended November 5 to 11.23 million barrels from 11.33 million barrels a week earlier.

As for gasoil/diesel, the market reportedly stayed under pressure as the buildup of supplies within the region remained high. Import demand from Middle East and Asia was dull due to increased domestic supply in the Middle East, and the lackluster economy in Asia and Europe. Platts further disclosed that stockpiles of middle distillates in the key trading hub of Singapore rose by 111,000 barrels or 1% from the previous week to stand at a three-week high of 11.533 million barrels in the week ended November 5.

Overall, Dubai crude decreased week-on-week by US$4.20/bbl. Likewise, MOPS gasoline and diesel decreased as well by about US$4.00 and US$1.50 a barrel respectively.

FOREX: Peso per US dollar rate depreciated by P0.17 to P44.98, from P44.81 in previous 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 11 November 2014, most oil companies implemented their price rollbacks by P1.00/liter for gasoline, P0.35/liter for diesel and P0.15/liter for kerosene.

LPG had its 10th price rollback this year by P7.00/kg or P77.00/11kg-cylinder, effective 01 November 2014. LPG price movement takes effect once a month, every first week of the month.

Year-to-date, gasoline and diesel have a total net decrease of P6.54/liter and P7.98/liter, respectively. LPG has a net decrease of P27.32/kg.

* RON 95

For more information, call the

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