WORLD OIL PRICES (November 17-21, 2014 trading days)

Crude oil prices slipped lower, ranging $74 to $77 a barrel during the week on increased crude exports of Saudi Arabia despite signs of an oversupplied market. Also, OPEC producers appeared divided ahead of its November 27 meeting in Vienna to discuss output.

OPEC heavyweight Saudi Arabia has so far shown no indication that it will support a reduction in OPEC production as planned by other OPEC-members. Venezuela and Ecuador have called publicly for a cut while Iran has hinted at a need to reduce output as oil producing countries see their incomes slide.

Other reports that are supporting the international oil market are:

• Disappointing report on Chinese manufacturing. HSBC's preliminary November Purchasing Managers Index (PMI) for China fell to 50 from 50.4 in October. A rating below 50 means contraction;
• Drop in Eurozone business activity. The composite PMI of Eurozone business activity dropped to 51.4 in November, down from 52.1 in October, the slowest pace in 16 months;
• Increase in U.S. crude stockpiles. The data from the American Petroleum Institute (API) showed an increase in U.S. crude stockpiles by 3.7 million barrels in the week ending Nov. 14, including a 1.4-million-barrel build at the Cushing oil hub;

However, US’ strong economic data and cold weather in the United States with temperatures in all 50 states dipping to freezing or below balances the oil market. Freezing temperatures suggests a boost in demand for heating oil.

For the Asian gasoline market, spot trading reportedly picked up as various tenders emerged. Nevertheless, physical supply/demand fundamentals remained mixed, Platts noted. While key regional buyer Indonesia could seek more 92 RON cargoes, demand for the country's primary motor fuel 88 RON could wane after the government raised subsidized fuel prices this week. Asian gasoline supply remained sufficient, amid steady regional production and even as barrels of blending components from Europe head to Asia.

On the other hand, Platts stressed that the medium to high sulfur Asian gasoil/diesel market is supported by the emergence of spot demand from East Africa and Sri Lanka. Further buying support is expected from Iran. The country is planning to resume gasoil imports temporarily to feed its power plants this winter, as natural gas consumption by Iranian households is expected to rise during this period (Zagros basin in the west experience severe winters with below zero average daily temperatures and heavy snowfall). On the supply side, gasoil exports from Japan have eased as the country minimizes gasoil production and maximizes kerosene production amid a wide regrade and to stockpile the heating oil for winter.

Overall, Dubai crude decreased week-on-week by US$2.50/bbl. MOPS gasoline and diesel decreased as well by US$3.30/bbl and US$3.00/bbl.

FOREX: Peso per US dollar rate depreciated by P0.11 to P45.00, from P44.89 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 today, 25 November 2014, some oil companies implemented price rollbacks by P0.90/liter for both gasoline and diesel.

This brings the year-to-date net decrease for gasoline and diesel to P8.24/liter and P9.38/liter, respectively.

* 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