New wave of oil price rollback due next week

by Myrna M. Velasco

Consumers can enjoy continued financial relief on their fuel budgets next week, as domestic pump prices will be on another round of significant price rollbacks on Tuesday, Dec. 6 based on the calculation of the industry players.

Gasoline prices may be trimmed by P1.90 to P2.30 per liter while diesel prices will be reduced by P1.80 to P2.20 per liter. 

For kerosene, a commodity essential for the aviation industry and for heating fuel and cooking needs of some households, the price cut was calculated at P1.35 to P1.65 per liter.

Despite the series of price downtrends in recent weeks though, a monitoring report of the Department of Energy (DOE) showed that cost movements since the start of the year still registered net increases of P33.85 per liter for diesel; P17.75 per liter for gasoline; and P27.85 per liter for kerosene products. 

Global oil prices nosedived to as low as $81 per barrel for international benchmark Brent crude last week, but regained strength to the level of $85 per barrel as of Friday, Dec. 2, trading.

According to industry experts, the escalation in prices toward the end-week trading had been due to clearer signals from China that it may relax its Covid restrictions soon, a move that could drive up fuel demand moving forward.

Market watchers are also raising assumptions that if China will re-open, even the Organization of the Petroleum Exporting Countries and its ally-producers (collectively known as OPEC+) may no longer pursue planned production cutbacks.  

Global oil producers, which will meet Sunday, Dec. 4, are expected to tackle the main agenda on proposed price capping of Russian oil by the European Union-member countries apart from the supply-demand trajectory to be weighed by China.

EU economies had tentatively decided on $60 per barrel price cap on Russian seaborne oil to take effect immediately on Monday, Dec. 5.

The OPEC+ meeting next week is seen as one of the key developments that will influence global price movements in the days ahead, especially if they will come up with major pronouncement on any new output quota.