Oil Monitor as of 01 June 2021

WORLD OIL PRICES (May 24-28, 2021 trading days)

Dubai crude has increased week-on-week by around US$0.90/bbl. MOPS gasoline and diesel have also increased by almost US$1.50 and US$0.75 per barrel, respectively.

Reasons for the Adjustment

Oil prices rose, from last week’s losses, to a two-year high on the back of increased global oil demand and renewed optimism from the lifting of restrictions in much of Europe and the US. But huge resistance kept the Brent crude price slightly below the $70 mark.
- As the rollout of global vaccinations continues to accelerate and people start traveling more, the upcoming strong demand for gasoline and jet fuel is seen to be the primary driver.
- "Success in beating the pandemic and getting our economy back on track has led to increased demand for gas as the country re-opens," the US Press Secretary Jen Psaki said.

In Asia, oil demand remain a concern as coronavirus crises continued to re-impose lockdowns in several countries.
- Malaysia re-enter a nationwide two-week lockdown from June 1, so as in Ho Chi Minh City, Vietnam as the authorities rushes to test all of its 13 million residents after a sharp rise in new coronavirus cases.
- Market participants also keep an eye on China after a sudden surge of coronavirus cases caused to re-impose lockdowns in the populated city of Guangdong.
As oil prices nearing $70/bbl, and that Western economies are humming from robust COVID-19 vaccine campaigns, coupled with the kick off of summer driving season, OPEC and its allies are expected to be sending more crudes to the market.

However, reports disclosed that the OPEC+ technical committee meeting kept OPEC global oil demand growth forecast for 2021 unchanged at about 6 million b/d and slightly increased its forecast for supply deficit to 1.4 million b/d.
Ahead of the June 1 OPEC+ ministerial meeting, Russia mentioned that the coalition should consider a possible increase in Iranian output when assessing further steps.
Meanwhile, Platts Analytics expect supply to follow demand with strong month-on-month increases, of about 4.6 MMB/D in oil supply from May to August. OPEC+ crude production will account for more than 3.3 MMB/D of this growth, Iran about 0.5 MMB/D, global NGLs about 0.3 MMB/D, and the rest will come from other non-OPEC.
The Asian gasoline market was steady to slightly firmer May 28 as light distillate stocks in Singapore showed a drawdown due to lower exports from China.
- China's Gaoqiao Petrochemical Corp. was heard to be likely skipping gasoline exports in June and cater instead to the domestic market.
- The government plan to levy a consumption tax on imported aromatics effective June 12, making gasoline blended from the material less competitive; thus, refineries preferred to save more barrels for domestic sales.
The Supply balances for gasoil/diesel, especially for the ultra low sulfur diesel grade, remained in flux at the end of the week May 28.
- A few market participants remained hopeful that signs of a budding recovery in Europe could spur gasoil demand, which in turn could lift the sentiment in Asia.

FOREX: Philippine peso depreciated week-on-week against the US dollar by P0.18 to P48.05 from P47.87 in previous week.

DOMESTIC OIL PRICES

Effective 01 June 2021, the oil companies implemented a price increase in domestic oil products. Gasoline has increased by P0.60-P0.80 per liter, diesel by P0.40 per liter and P0.25 per liter for kerosene.

These resulted to the year-to-date adjustments to stand at a total net increase of P9.30/liter for gasoline, P7.60/liter for diesel and P6.10/liter for kerosene.

For the updated prevailing retail pump price, please browse this link: https://www.doe.gov.ph/price-monitoring-charts?q=retail-pump-prices-metro-manila.

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

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