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Thursday, March 28, 2024

Oil price hike looms

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Pump prices of diesel, gasoline and kerosene will likely go up by as much as  P1.50 per liter this week to reflect the movement of world oil prices.

Traders have been expecting  a possible cut in production ahead of the meeting of the Organization of Petroleum Exporting Countries and other fuel – producing countries over the weekend.

“Based on our monitoring of international prices, gasoline, diesel and kerosene prices are estimated to increase between P1 and P1.50 per liter,” a source said.

World oil prices have significantly gone down since late 2014 due to oversupply of oil from the US, which has been compounded by the decision of Opec not to cut production.

Last April 12, the oil companies implemented a rollback by P0.70 per liter for gasoline, P0.50 per liter for diesel and P0.55 per liter for kerosene.

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Oil prices initially declined early last week  on renewed concerns over continuing supply, but the Energy department said mixed reports of renewed demand behind indications of moderate economic growth in China and reassurance to hold Opec and non-Opec production levels at January 2016 levels sent prices back higher starting midweek.

The statement of Saudi Deputy Crown Prince Mohammed bin Salman that the country will not freeze oil output unless other major producers join the agreement initially set prices lower by more than $1.

Oil prices rose anew in succeeding trading days behind reports of a big decline in US crude stockpiles, moderate economic growth in China and reassurance by Kuwaiti Opec governor Nawal al-Fezaia that the upcoming April 17 meeting among Opec and non-Opec producers will deliver an agreement to hold output at January levels.    

The department, however, said analysts of Goldman Sachs noted that a freeze “at recent production levels would not accelerate the rebalancing of the oil market.”

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