Big-time hike in oil prices due next week

BY MYRNA M. VELASCO

Jul 15, 2023 09:25 AM

  

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Big-time oil price hike across products await motorists next week, based on advisories by oil companies.

Based on the calculation of the industry players, the price of gasoline will rise by as much as P1.90 to P2.30 per liter; while diesel prices will also climb by P1.95 to P2.35 per liter.

For kerosene, which is an indispensable commodity for many households especially in the rural areas as well as key industries like aviation, its price will increase by P1.70 to P2.00 per liter.

Oil firms will implement the price adjustments on Tuesday, July 18, based on the Mean of Platts Singapore (MOPS), a price index for traded fuel commodities in the region.

The big jump in prices next week is partly traced to the fresh round of rally in the spot prices of fuel commodities on a global scale, with international benchmark Brent crude breaking above $81 per barrel as of Friday, July 14, trading.

According to global experts, the uptick in prices had been mainly traced to the production cuts of Saudi Arabia extending into August; as well as the export curtailments being enforced by Russia.

Market watchers indicated that "backwardation" appeared to have been the prevailing sentiment in the market last week, entailing that spot prices had been higher than the prices of fuel commodities traded in the futures market.

While there was reported buildup in the inventory of the United States, industry experts noted that such development had been largely unnoticed in last week’s commodities’ trading.

This early, the Organization of the Petroleum Exporting Countries (OPEC) already laid down forecasts that demand growth next year will likely top 2.25 million barrels per day, triggering additional pressure on global oil prices.

Compounding the geopolitical factors had been production stoppage in one of the oil fields of Libya, one of the member-producers of OPEC, and that was due to a kidnapping incident involving a former government official.

Mixed adjustments in pump prices seen on Tuesday

BY MYRNA M. VELASCO

Jul 9, 2023 02:40 AM

  

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AT A GLANCE

• The colliding factors which influenced oil prices last week had been the niggling forecast of slower global economic growth and inventory drop in the US versus the production cut of Saudi Arabia extending into August as well as the pronouncement of the US Federal Reserve on continued enforcement of interest rate hikes.

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Motorists using diesel products will pay more next week while gasoline users can look forward to a price cut, according to the oil companies.

Industry players said diesel prices may rise by P0.55 to P0.85 per liter while RON92 gasoline, which is widely patronized in the Philippines, will likely be down by P0.30 to P0.60 per liter. For RON95 gasoline products though, the calculation is a marginal hike of P0.05 to P0.15 per liter.

For kerosene, which is a commodity generally used in households and as a base for aviation fuel, there is expectation for a moderate increase of P0.35 to P0.65 per liter.

Being the usual grind in the domestic petroleum sector, the oil firms will be adjusting their prices on Tuesday, July 11, to be anchored on the cost swings of the Mean of Platts Singapore (MOPS), the reference pricing being employed by the industry.

As culled from the monitoring report of the Department of Energy (DOE), price adjustments since the start of the year logged net decreases of P3.70 per liter for diesel and P6.00 per liter for kerosene while gasoline products posted aggregate hike of P5.85 per liter.

Pricing seesaw dominated global oil markets last week with prices going down in the initial trading days due to the broader inventory drop reported by the United States, the world’s biggest oil consumer due to lingering concerns of slower global economic growth.

The antithesis to those developments, however, had been last week’s pronouncement of the US Federal Reserve that interest rate hikes would still very much be on its agenda and the announcement of Saudi Arabia on its production cut extending into August.

The colliding factors influencing oil prices essentially pushed international benchmark Brent crude above $78 per barrel as of end-week trading on July 7 from a lower base of $75 per barrel level in the prior week.

Other geopolitical factors monitored in global oil markets had been the month-on-month decline in Venezuela’s oil production as well as the oil tankers of Iran that had been seized by the US Navy in the Gulf of Oman.

Closer to home, industry traders are also closely keeping track of the ‘energy crunch’ predicament of Singapore that had been compounded by the power price cap enforced by its government, as that too, could exert pressure on fuel commodities being traded in the region in the days and weeks ahead.

0.70/liter price cut for gasoline, diesel

BY MYRNA M. VELASCO

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Motorists will gain financial relief at the pumps this week as the price of gasoline and diesel products will be on rollback by P0.70 per liter, based on the pricing adjustment advisories of the oil companies.

For kerosene products, the industry players similarly announced price cuts of P0.85 per liter and that had been anchored on the movement of prices in the world market.

As of this writing, the oil firms that already sent notices on their price reductions effective Tuesday (July 4) had been Shell Pilipinas Corporation, Seaoil, Cleanfuel, Chevron, Jetti and PetroGazz; while their competitor-firms are anticipated to follow.

Prior to this round of adjustment, domestic petroleum prices since the start of the year logged net decrease of P3.00 per liter for diesel and P5.15 per liter for kerosene; while gasoline prices had a net increase of P6.55 per liter.

The cost adjustments at the domestic pumps had been referenced on the Mean of Platts Singapore (MOPS), the pricing barometer adopted by the deregulated downstream oil industry.

Prices in the world market had been on downtrend last week, on lack on factors that could lift market sentiments versus portended global economic growth slowdown.

While mammoth oil consumer United States had reported decline on inventory, that did not come as enough succor to any upward price pressures on traded oil commodities last week.

As of Monday (July 3), spot trading prices for international benchmark Brent crude had been hovering at $75 per barrel scale, barely moving from its level last week.

Nevertheless, global oil markets have been looking forward to any potential declaration that the Organization of the Petroleum Exporting Countries (OPEC) may be coming up on their International Seminar that is slated this July 5-6.

There is no clear direction yet how prices would swing this week, but market watchers have not been expecting major developments that could jolt oil market fundamentals in the days ahead.

Big time oil price rollback on Tuesday

More than P2.00/liter price cut across commodities

BY MYRNA M. VELASCO

  

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AT A GLANCE

• • Renewed fears of banking crisis contagion precipitated price slump in trading last week
• • Price decline had been compounded by weak industrial figures from China and other geopolitical events
• • Markets look forward to outcome of the in-person meeting of OPEC+ by June

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Motorists are in for significant financial relief with oil prices on on big time rollback next week due to the downtrend of prices in the world market, according to industry players.

Based on estimates, gasoline prices will be trimmed by P2.10 to P2.40 per liter; while diesel prices will have heftier reduction of P2.60 to P2.90 per liter.

For kerosene, a key fuel commodity for households and vital industries like aviation, its price will decrease by P2.30 to P2.60 per liter.

Domestic oil firms will be implementing the price cuts by Tuesday, May 9, and it will be anchored on cost swings of the Mean of Platts Singapore (MOPS), the pricing benchmark for traded petroleum commodities in the regional market.

Global experts said that last week’s plummet in oil prices had been mainly due to renewed fears of banking crisis contagion following the recently reported collapse of First Republic Bank in the United States.

Such dismal development in the global banking industry was compounded by weaker-than-expected industrial figures from China; hence, reinforcing jitters of overall slowdown in global economic growths.

Futures contract for international benchmark Brent crude plunged to the level of $74 per barrel last week, a drop from $79 to $80 per barrel from trading days in the prior week.

Compounding the geopolitical dilemma of the oil markets last week had been reports of hijacked oil tankers in the Strait of Hormuz along the Persian Gulf, as well as the lingering deadlock on oil exports that will be coming from the Kurdish region of Iraq.

Conversely, news of falling inventory in the US partly propped market as of Friday (May 5) trading, with crude prices rising slightly to $75 per barrel, but market watchers noted that was not enough to lift sagging prices.

Onward, the major development anticipated in markets would be the outcome of the scheduled in-person meeting of the Organization of the Petroleum Exporting Countries and its ally-producers (OPEC+) by June 4, especially if they will come up with any decision to arrest the precipitous slide in prices.

Gasoline price cut by P1.50/liter; diesel by P1.30/liter

LPG prices rise by P0.85/kg

BY MYRNA M. VELASCO

May 1, 2023 02:34 PM

  

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AT A GLANCE

• Consumers will have a mixed spending cargo this week as the price of petroleum products at the pumps will be on rollback; while cooking fuel LPG will be increased by P0.85 per kilogram.

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Motorists can rest easy this week, as the price of gasoline products will be on rollback by P1.50 per liter, while diesel prices will also go down by P1.30 per liter, based on the announcement by oil companies.

Industry players also sent notices for a price cut of P1.40 per liter for kerosene, an essential commodity support to key industries, primarily the aviation sector.

As of this writing, the oil firms that already advised on their price cuts had been Pilipinas Shell Petroleum Corporation, Seaoil, Cleanfuel and Chevron Philippines effective May 2 (Tuesday); while their competitor-firms are all anticipated to follow.

The domestic oil companies will be trimming their prices this week based on the costs swing of the Mean of Platts Singapore (MOPS), the pricing index for fuel commodities being traded in the regional market.

Conversely, for liquefied petroleum gas (LPG) which is the preferred cooking fuel of most Filipino households, this will rise by P0.82 to P0.85 per kilogram (kg) or aggregate P9.02 to P9.35 for the standard 11-kilogram cylinder.

The LPG firms that already announced price hikes include Petron Corporation, Phoenix Petroleum at P0.85 per kg; while Solane has a leaner increase of P0.82 per kg - all effective on May 1 and that pricing adjustment will stay for the rest of the month.

Additionally, Petron and Phoenix Petroleum advised that the prices of their autoLPG products for vehicles will go higher by P0.48 per liter this month.

For the oil products at the pumps, experts noted that the softening of prices in the world market last week had been generally anchored on reinforced sentiment of global economic slowdown – which was strongly manifested by reported decline in capital goods spending of the United States, a mammoth oil consumer.

Fears of economic recession have been a recurring theme igniting downward pressure on global oil prices since last year; and until this time, there are no concrete projections yet that markets can steadily lean on to when it comes to the world’s overall economic health.

The downswing in international oil prices has been permeating in recent weeks despite earlier announcement by the Organization of the Petroleum Exporting Countries and ally-producers (OPEC+) that they will be cutting down production starting this May.

Diesel prices cut by P0.40/liter; gasoline up by P0.30/liter

Motorists filling up their vehicles with diesel will experience a breather this week, as the price of this commodity will be down by P0.40 per liter, based on the pricing adjustment advisories of the oil companies.

Conversely, gasoline products will have slight increase of P0.30 per liter; while kerosene prices will have marginal uptrend of P0.10 per liter.

As of this writing, the industry players that already announced their price adjustments had been Pilipinas Shell Petroleum Corporation, Seaoil, and Cleanfuel effective Tuesday (April 18); while their competitor-firms are all anticipated to follow.

The domestic oil firms will be enforcing cost movements based on the swing of crude and finished products prices in the regional market as referenced on the Mean of Platts Singapore (MOPS), which has been the adopted benchmark of the deregulated downstream petroleum industry of the country.

There had been seesaw in prices in the world market last week because of diverging sentiments manifesting when it comes to projections on supply and demand - primarily in the second half of the year.

As noted by industry experts, following the announcement of the Organization of the Petroleum Exporting Countries and its ally-producers (collectively known as OPEC+) in the first week of April, prices escalated to the level of $87 per barrel.

However, due to the forecast of OPEC that demand will likely be weak during the second half of this year, prices dropped to the level of $84 per barrel for most of trading days last week.

By Friday (April 13), international oil prices had been on upswing again because of the pronouncement of the International Energy Agency (IEA) that there could be ‘supply deficit’ by the latter part of this year if OPEC+ producers will concretize their voluntary output cut.

As of Monday (April 17 trading), spot contracts for international benchmark Brent crude climbed to $86 per barrel from a relatively leaner $85 per barrel as of Friday (April 14) trading.

Rollback in oil prices to continue next week

Hefty rollback in LPG prices seen by April 1

BY MYRNA M. VELASCO

  

AT A GLANCE

The new round of rollback in pump prices has been triggered by continuing slump in global oil prices

Filipino consumers to also benefit from lower LPG prices by April 1

Declaration on non-replenishment of the strategic petroleum reserve (SPR) of the US this year contributed to downcast market sentiment

Consumers will continue to save on their fuel expenses next week, as oil companies have declared a fresh round of rollback at the oil pumps by Tuesday, March 28), the 13th week of price adjustments since the start of the year.

According to industry players, gasoline prices will be trimmed by P0.65 to P1.05 per liter, while prices of the typically preferred diesel product for the transport sector will be reduced by P1.10 to P1.40 per liter.

For kerosene, an essential commodity for households and key industries, like the aviation sector, this will be cut by P1.45 to P1.85 per liter, based on the calculation of the oil companies.

Additionally, players of the liquefied petroleum gas (LPG) industry are projecting massive downtrend for this commodity by April 1 to the tune of P7.50 to P8.50 per kilogram and that could redound to overall reduction of P82.50 to P93.50 for the standard 11-kilogram cylinder being purchased by households for their cooking needs.

LPG prices are adjusted monthly starting the 1st day of the month and this is benchmarked on Saudi Aramco contract prices, while prices at petroleum pumps move on a weekly basis as referenced on the Mean of Platts Singapore (MOPS), the pricing barometer for oil commodities traded in the region.

A monitoring report of the Department of Energy (DOE) has shown that prices since the start of the year still logged overall increase of P5.50 per liter for gasoline products, while it was a reverse for diesel with a net decrease of P2.85 per liter, along with kerosene, which went down by aggregate P3.65 per liter.

As noted by global experts, oil prices continued to nosedive on last week’s trading days because of the latest pronouncement by the Biden administration that the US is not keen on replenishing yet its strategic petroleum reserve (SPR) this year had not lifted market sentiment for a potential demand rebound.

As of Friday, March 24 trading, settlement for international benchmark Brent crude futures was hovering at $74 per barrel, a steady level from the prior week.

Nevertheless, oil industry watchers have been seeing "bright spots" for prospective market ricochet as the banking crisis appeared to have been easing already that is anticipated to usher in a fresh round of rally on prices in the days ahead.

In the past weeks, the collapse of the Silicon Valley Bank in the US as well as that of Credit Suisse in Europe had triggered crash in global oil prices because many hedge funds and money managers were prompted into selling their oil futures and option contracts.

Nevertheless, the panic had not lasted long because of the immediate remedial measures enforced to calm market uncertainties ignited by the disintegration of the two banks.

Mixed oil price adjustments next week

by Myrna M. Velasco

Consumers will experience mixed oil price adjustments at the domestic pumps next week, as diesel will be on rollback, while gasoline and kerosene prices will increase, according to oil companies.

Based on the calculation of the industry players, diesel prices will be reduced by P0.40 to P0.70 per liter, while gasoline products will incur a price hike of P0.45 to P0.75 per liter. 

Kerosene, which is the other essential commodity with weekly price adjustments, will have a price uptick of P0.35 to P0.65 per liter.

Oil companies will implement the price adjustments on Tuesday, Dec. 27, based on cost movements referenced on the Mean of Platts Singapore (MOPS); and this will already be the last one for the year. 

A monitoring report of the Department of Energy (DOE) has shown that prices since the start of the year still posted net increases of P27.50 per liter for diesel; P13.95 per liter for gasoline; and P20.80 per liter for kerosene products.

In the initial trading days last week, market experts noted that international benchmark Brent crude stayed close to $80 per barrel, as there was relatively no new major development that could exert pressure on prices.

However, the pummeling of a winter storm in many parts of the United States triggered fresh round of rally in price pushing international benchmark Brent crude near the $84 per barrel territory as of Friday, December 23) trading. 

The other factor being monitored closely by industry experts would be the enforcement of “money tightening measures” that major economies of the world would be pushing, especially with the lingering threats of economic recession hitting next year.

By 2023, the overall prognosis will be for oil markets to be continuously saddled with tight supply predicaments that will then trigger price escalations at the pumps.

For a heavily import-dependent economy like the Philippines, it will be left with no choice but to grapple with pricing volatility of oil commodities that will be coming into its shores.

Diesel prices down by P3.40/liter; gasoline by P1.70/liter

by Myrna M. Velasco

Filipino motorists can tick off fuel budget as one less worry for them this week, primarily diesel for public transport, as the price of this commodity will be on a hefty rollback of P3.40 per liter by Tuesday, Dec. 13. 

Additionally, the industry players have reduced the price of gasoline products by P1.70 per liter, while kerosene prices will go down by P4.40 per liter.

As of this writing, five oil firms that already sent notices on their price cuts. These include Pilipinas Shell Petroleum Corporation, Seaoil, Cleanfuel, PetroGazz and Chevron, while their competitor firms are all expected to follow. 

Players in the domestic deregulated downstream oil industry have been adjusting their prices weekly based on the costs swing of the Mean of Platts Singapore (MOPS), a pricing index anchored on the outcome of petroleum commodities trading in the regional market.

Softer fuel prices in the thick of the traffic-stricken Christmas season will be highly beneficial to the consumers, especially so since most are now trooping to the malls or parties as part of the long holiday celebrations.

As of Monday, Dec. 12 trading, international benchmark Brent crude was roughly steady at $76 per barrel – and there are not much significant geopolitical events being anticipated yet to be exerting pressure on prices in the days ahead. 

Last week, even signals of easing of Covid restrictions in China failed to lift market sentiments, hence, the overall pricing trend for spot-traded fuel commodities tracked downward trajectories.

There were also concerns of delayed oil shipments via Turkish Strait; as well as an oil spill dilemma that halted the operation of a US oil pipeline delivering oil from Canada; but those incidents were not able to ignite rally in prices.

At this stage, there are projections that prices may stay longer in the $75 to $76 per barrel range, unless, major global events would erupt and disturb market fundamentals anew – similar to what happened in the onset of the Russia-Ukraine war in February this year.

For a heavily import-dependent economy like the Philippines, crashing prices come off as a gainful advantage, particularly at this time when Filipino consumers are reeling hard from the whip of soaring prices of basic commodities.

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.