WORLD OIL PRICES (09-13 Feb 2015 trading days)

The preceding week’s sharp increases continued up to the first trading day of the reference week. However, oil prices slowly receded starting Tuesday when the International Energy Agency (IEA) released its forecast that ample supplies will raise global inventories before investment cuts begin to significantly dent production

The IEA said in its five-year forecast that crude prices will recover from around their current range of $50-60 per barrel, but remain well below the level of more than $100 per barrel seen before the slump began last June.  It further noted that while the world supply-demand balance in oil was expected to tighten by end-2015, the "downward market pressures may not have run their course just yet".  The IEA also predicted that demand for oil from the Organization of the Petroleum Exporting Countries (OPEC) will hold at 29.4 million b/d this year, and said U.S. shale oil output growth will pause before regaining momentum.  

The US-EIA inventory report released Wednesday likewise added support to the price slide.  The U.S. crude stockpiles reportedly reached a new record, as it rose by a slightly bigger-than-expected 4.9 million barrels to 417.9 million barrels in the week ended 06 February.    

Meanwhile, fundamentals in the Asian gasoline market remains lackluster as of Thursday, according to Platts.  Indonesia is minimizing imports on ample supply and exports from biggest regional exporter China declined ahead of the Lunar New Year next week.  However, Platts also added that the price firm-up these past few trading days were mainly on the back of a strong US RBOB crack.  This significant support in the US gasoline market stems from uncertainty over labor protests at a few refineries and chemical plants called by the United Steelworkers union (USW).  Union workers went on strike after their three-year contract expired on 01 February and industry negotiators, represented by Shell, failed to address serious concerns raised by USW.  Updates disclosed that issues are yet to be resolved, and negotiation between the two parties will continue on 18 February.  

On the other hand, market sources stated that Asian gasoil market continued its marginal recovery amid spot demand from Vietnam ahead of the Tet holidays (Lunar New Year), a stronger market in Europe, and an outflow of arbitrage cargoes from the Middle East and India to the West.  Yet, Platts stated that supply remained plentiful with regional refiners running their plants at high rates, so there remained downward pressure on the gasoil market going forward.                                                                

Overall, Dubai crude increased week-on-week by US$2.69.  MOPS gasoline and diesel also increased by US$3.76 and US$4.60 respectively.    

FOREX:  Peso per US dollar rate appreciated week-on-week by about P0.21 to P44.34, from P44.14 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 17 February 2015, most of the oil players implemented a P1.15/li increase in gasoline and kerosene, and P1.50/liter in diesel.
The total year-to-date adjustments for gasoline are now tallied at a net decrease of P0.05, while diesel now has P0.75. LPG remains at net decrease of P4.80/kg

* RON 95

For more information, call the

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