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Monday, March 4, 2024

DOE sees pressure on oil prices to rise with Russian export halt

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The Department of Energy (DOE) on Monday said it will actively monitor the world oil supply situation after the Russian government announced it will temporarily limit oil exports to avoid domestic shortages.

“It appears this will have an effect of a restriction in supply, so by implication, there will be pressure for prices to increase, so we have to monitor the next few days if there will be an actual increase,” DOE director for the Oil Industry Management Bureau Rino Abad said.

Meanwhile, Abad said DOE expects the international price of crude oil to stay at the current level of around US$90 per barrel since there is no change in the Organization of the Petroleum Exporting Countries and its allies’ production cut policy until the end of the year.

“On a weekly basis there are possibilities of both increases or decreases up to the end of the year as the volatility of price affects our domestic price,” he said of the group called OPEC+.

“However, it is not expected that any decrease will result in the US$77 per barrel level for crude oil seen way back in March, which is before the implementation of this year’s new sets of production cuts,” Abad said.

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Dubai crude has reached $93 per barrel, and analysts believe it could reach up to $100 per barrel.

Sources told Manila Standard that a $7 per barrel increase would translate to an additional P3 per liter increase in domestic pump prices.

Average prices for gasoline in the National Capital Region currently range from P62.35 to P90.15 per liter, diesel from P62.95 to P87.10, and kerosene from P80.75 to P93.09.

This developed as consumers experienced a reprieve from 11 consecutive weeks of oil price increase on Tuesday, as the country’s oil firms cut pump prices by P0.50 per liter for kerosene and by P0.20 per liter for gasoline and diesel effective 6 a.m. Tuesday.

The decline in world oil prices last week was driven largely by the US Federal Reserve’s warning of more price hikes, although this was tempered by expectations of tight supply until the end of the year.

“Phoenix Petroleum Philippines will decrease the prices of gasoline and diesel by P0.20 per liter effective 6 AM of 26 September 2023,” the company said in a statement.

Seaoil Philippines, Cleanfuel, Jetti Petroleum, and Chevron Philippines also announced their respective price cuts.

On Sept. 18, the oil companies increased prices by P2 per liter for gasoline and kerosene, while diesel has an increase of P2.50 per liter.

These price adjustments resulted in year-to-date net increases of P17.50 per liter for gasoline, P13.60 per liter for diesel, and P9.94 per liter for kerosene.

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