Oil player Phoenix Petroleum Philippines led the seventh round of oil price rollback this week by announcing a price cut of as much as P2.20 per liter starting noon Saturday.
READ: Phoenix sets off sixth price rollback
“We will decrease the prices of gasoline by P1.10 per liter and diesel by P2.20 per liter effective noon of 24 November 2018,” Phoenix said in its advisory late Friday.
Other oil players are expected to implement a similar price cut.
Unioil Philippines, for its part, said consumers should expect fuel prices to rollback again this coming week.
“Diesel should decrease by P2.30-P2.40 per liter while gasoline should decrease by P1.10 to P1.20 per liter. Load up accordingly,” Unioil said.
In New York, oil prices slumped Friday (Saturday in Manila) to lows not seen since last year as concerns over high crude supplies and uncertain economic growth triggered massive selling.
The petroleum slump, which took major oil contracts down to their lowest level since October 2017, comes as oil output remains high in the United States, Russia, and Saudi Arabia and as some forecasters have trimmed their outlook for global growth, due in part to the US-China trade fight.
US oil benchmark West Texas Intermediate dropped $4.21 to $50.42 a barrel for January delivery, a decline of 7.7 percent.
In London, Brent oil futures for January delivery, slid 6.1 percent to $58.80 per barrel.
“The truth of the matter remains that rising global crude supply coupled with worrying signs of slowing demand have written a recipe for disaster for the oil markets,” said Lukman Otunuga, a research analyst at FXTM.
Unioil said that since Oct 15, 2018, the price of diesel has decreased by a total P6.20 and the price of gasoline has decreased by a total of P9.15.
World oil prices continued its decline amid ample supply while economic headwinds raised fears of a slowdown in demand.
“The market is weak and will likely remain so for the rest of the year due to excess supply in the market,” the Department of Energy said in its latest monitoring report.
Last week, the oil firms also cut pump prices by P1.25 to P1.30 per liter for gasoline, P1.10 per liter for diesel and P0.80 per liter for kerosene.
Prior to this latest rollback, year-to-date adjustments as monitored by the Department of Energy are now at a net increase of P2.60 per liter for gasoline, P6 per liter for diesel and P5.63 per liter for kerosene.
Gasoline in Metro Manila currently sells from P44.40 to P58 per liter while diesel sells from P40.40 to P49.19 per liter depending on the location, brand, and other competitive factors.
Global stock markets were mixed, with major US indices retreating in part due to worries about lower oil prices and weak global growth.
Bourses in Paris and Frankfurt notched modest gains, while London, Shanghai and London all fell.
Trump effect?
High global oil production compared to demand was the top reason for Friday’s selling, while the outlook for a weakening world economy led investors to conclude that growth would not be strong enough to soak up the surplus.
The retreat comes ahead of a meeting of the Organization of Petroleum Exporting Countries in Vienna on Dec. 6.
Some analysts view the organization as constrained following heavy pressure from US President Donald Trump on Saudi Arabia.
Earlier this week, Trump thanked Saudi Arabia for low prices and decided to essentially overlook the Central Intelligence Agency’s reported conclusion over Crown Prince Mohammed bin Salman’s involvement in the gruesome murder of journalist Jamal Khashoggi, a stance that has outraged White House critics.
“Although most analysts claim that this has to do with supply overhang and increased production from Russia and Saudi Arabia, the bottom line is that the US President keeps pushing for lower prices,” said Fiona Cincotta, senior market analyst at City Index trading group.
“While this is the case it will be difficult to see a return to oil at a higher level unless oil cartel OPEC decides on a major output cut at its next meeting.”
But Andy Lipow of Lipow Oil Associates predicted the “Saudis will decide in their best interest to cut production,” adding that “it will not have an impact on the relationship with Washington because the US already said how this relationship was important and how important was the weapon business with the Saudis.”
Still, Friday’s drop in prices reflects market concern that OPEC production cuts are “not going to be enough to support prices,” Lipow added.
The drop in oil prices reverberated in equity markets, with oil giants Chevron, Royal Dutch Shell and Total all shedding three percent or more on their local bourses.
Chinese shares also stumbled as Shanghai slumped by more than two percent, with the tech sector hit hard by a Wall Street Journal report that Washington is urging its allies to avoid using equipment from Chinese telecoms giant Huawei.
Worsening trade tensions between the United States and China have shattered confidence on global trading floors. With AFP
READ: Phoenix agrees to freeze fuel price