WORLD OIL PRICES (June 13-17, 2016 trading days)

Crude oil prices declined over the week on worries about the global economy, a weaker-than-forecast fall in US stockpiles and expected pick-up in oil output. The price declines continued for a sixth straight session Thursday in Asia, tracking a sell-off across market equities but slightly recovered by Friday on easing concerns over British exit from European Union.

Specific reports that have predominant impact on oil market follows:

• Crude supply. Canada’s output likely to normalize as wildfires that hit its oil region subside, and that Nigerian rebels, who have been attacking crude installations, consider peace talks with the government;

• China’s economy. Concerns about faltering growth in China, largely due to industrial overcapacity and spiraling debt;

• IMF warning. International Monetary Fund warned global economic growth was lopsided.

• U.S. Fed Outlook. U.S. Federal Reserve Chair Janet Yellen said growth could not yet sustain an increase in key interest rates, quoting that "Inflation has continued to run below the committee's 2 percent longer-run objective, partly reflecting earlier declines in energy prices and in prices of non-energy imports".

• US crude inventory. The federal government’s EIA report revealed that crude inventories decreased by 933,000 barrels for the week ending June 10, lower than analysts’ expected decline of 1.4 million barrels. The modest stockpile draw down was reportedly due to lower imports and production. However, despite the fifth inventory decline in 6 weeks, current crude supplies are up 14% from the year-ago period and are at the highest level during this time of the year.

In Asia, demand for higher octane grades gasoline in Southeast Asia provided a slight pick-up in Singapore gasoline market on Friday. Spot requirements were seen from Petron-Malaysia that issued a buy tender earlier this week for 98,000 barrels of 95 RON gasoline and 80,000 barrels for 97 RON gasoline for second-half of July. IE Singapore data released last week showed light distillates stockpiles in the sity-state rose to 13.776 mil b/d for the week ended June 15, from 13.013 mil b/d a week ago, Platts said.

On the other hand, gasoil market has been supported over the week by prompt dates on supply tightness but Platts stressed that this was likely to wane soon as more cargoes were expected in July from India and China to Singapore. Supplies of ultra-low sulfur diesel are building within the region as the arbitrage to send cargoes from India and the Middle East to Europe is shut. Meanwhile, regional demand for gasoil for power generation and the agricultural sector would weaken going into the third quarter with higher rainfall expected thus, demand in the region was seen to be already softening. Vietnam, Myanmar demand for June was 40% down from May while India demand usually comes off 250,000-300,000 b/d from mid-June to end August.

Overall, week-on-week average Dubai dropped by almost US$2/bbl. Likewise, MOPS gasoline and diesel both decreased by more than US$2 a barrel.

FOREX: Peso per US dollar rate depreciated week-on-week by P0.19 to P46.30/US$ to P46.30, from P46.65 in previous week.

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

DOMESTIC OIL PRICES

Effective 21 June 2016, most oil companies cut their fuel prices by P0.65/liter for gasoline and diesel, and P0.45/liter for kerosene.

Year-to-date net adjustments are at net increase of P2.32/liter for gasoline and P5.00/liter for diesel.

* 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