WORLD OIL PRICES (Jan 5-9, 2015 trading days)

For the first time since May 2009, crude oil prices slumped this week below US$50/bbl, as global business growth slowed to its weakest in a year. According to JPMorgan's Global All-Industry Output Index, produced with Markit, the pace of global business growth eased to its weakest rate in over a year at the end of 2014 as expansion rates slowed in both the manufacturing and service industries.

Moreover, the declining prices were reportedly the result of high oil output clashing with sluggish demand. This was especially because of Europe which is still struggling with its debt crisis, and Asia, where China's growth is slowing and Japan is battling recession. Analysts believed that oil prices would likely remain skewed to the downside in the near term.

On the supply side, reports revealed that output from North American shale producers remains high, although drilling is slowing, and producer club OPEC has so far resisted calls to cut production in support of prices. OPEC instead defends its market share by lowering anew its crude prices to the US and Europe.

In Asia, Platts stressed that gasoline market remained bearish with weak demand from top regional buyers such as Indonesia and Vietnam, while supplies have remained steady. The weakness in US benchmark RBOB gasoline futures, amid growing supplies, also added to the bearishness. The US Energy Information Administration said the country’s gasoline stocks increased by 8.12 million barrels to 237.16 million barrels in the week ending 2 January 2015.

On the other hand, the Asian gasoil/diesel market reportedly remained balanced between limited demand and lower supply from North Asia.

Overall, Dubai crude decreased week-on-week by about US$6.30/bbl. Similarly, both MOPS gasoline and diesel decreased by US$6.50 and US$5.30 per barrel, respectively.

FOREX: Peso per US dollar rate depreciated by P0.26 to P45.00, from P44.74 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 12 January 2015, most of the oil companies implemented a decrease of P1.70/liter for gasoline, P1.50/liter for diesel and P1.60/liter for kerosene.

These has brought the total decrease this year to P2.65 in gasoline and P2.30 in diesel.

* RON 95

For more information, call the

Department of Energy:
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Email: oilmonitor@doe.gov.ph
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