WORLD OIL PRICES (May 30-June 3, 2016 trading days)

Crude oil seesawed through the trading week, and ending lower on Friday as investors were sifting through the downbeat U.S. jobs data and the outcome of the OPEC meeting. The Labor Department reported Friday that the soft U.S. jobs data incited market concerns about the country's economy and its oil demand in the coming months, which weighed on the oil prices by the end of the week.

The following reports were also said to have driven the weeks price movement in the international market:

• OPEC June 2 meeting. The commodity initially fell on Thursday as shareholders were still digesting the news about the OPEC again failing to set an oil output quota after a meeting on Thursday. Given this second time that OPEC has failed to work out an output ceiling at the conference in Vienna after the meeting last winter, analysts are of the opinion that this could be a sign of a wider gap between the cartel over the market strategy and interest.

• U.S. crude stockpiles. However, prices rebounded after a US Department of Energy report showed that commercial crude inventories sank by 1.4 million barrels last week, indicating a pickup in demand in the world’s top crude consumer. This however is still lower than a 2.5 million barrels drop forecasted by analysts.

• Reduced US crude production. Per DOE-EIA, domestic crude production fell to the lowest weekly level since September 2014, indicating that spending cuts by oil companies are taking their toll on output. Reports also say that a steady fall in US oil production, by more than 800,000 barrels a day since one year ago, has paralleled the sharp pullback of drilling rigs active in the US oil field.

In Asia, Platts’ industry sources noted Friday about a slight uptick in demand in the Asia Pacific region that is boosting sentiment, though was not enough to absorb the surplus barrels of gasoline. Data from IE Singapore showed Thursday that onshore light distillates stockpiles in Singapore climbed 1.4% to 15 million barrels in the week ended June 1. Inventory levels of gasoline, reformate, and naphtha has been largely rangebound for the past four months, fluctuating between 14.5 and 15.5 million barrels. Per Platts’ market sources, the key reason for such high levels of stocks was the transfer of floating barrels to landed storage, as well as increasing exports from China’s teapot refineries.

For the gasoil/diesel, the Asian market strengthened Friday on higher demand and arbitrage cargoes flowing from the Middle East to Europe and east Africa. Market sources said that growing demand from Europe has helped to clear some length in Asia. US refineries have also been cutting diesel output to produce more gasoline due to better margins, reducing exports to Europe.

Overall, average Dubai crude price increased week-on-week by US$0.40/bbl. Likewise MOPS diesel rose by US$0.61/bbl, contrary to gasoline that decreased by US$0.48/bbl

FOREX: Peso per US dollar rate depreciated week-on-week by about P0.11 to P46.65/US$, from P46.76 in the preceding week

Other recommended reference site: https://www.aip.com.au/pricing

DOMESTIC OIL PRICES

Effective 07 June 2016, the oil companies effected the following movements in the pump prices of the respective petroleum products: P0.15/li decrease in gasoline, P0.15/li increase in diesel; no movement in kerosene.

Given these adjustments in prices, the total year-to-date net increases now stand at P3.22/liter for gasoline and P5.35/liter for diesel. LPG remains at a net decrease of P5.38/kg.

* RON 95

For more information, call the

Department of Energy:
Pricing: 840-2187
LPG: 840-2130
Fuels: 840-5669
SMS: (0915) 4469421
Email: [email protected]
Website: https://www.doe.gov.ph