FOR the fourth time this month, oil companies announced on Saturday another cut in their pump prices, bringing their price reduction to more than P4 per litter for December.
The oil firms cut pump prices by P1.10 per liter for gasoline, P1.35 per diesel and P1.40 per liter for kerosene effective 12:01 a.m. of Dec. 21.
“Petron is pleased to announce the following price rollbacks effective 12:01 am for Blaze 100 Euro 4, XCS, Xtra Advance and Super Xtra, P1.35 per liter for Turbo Diesel and DieselMax and P1.40 per liter for kerosene. These reflect movements in the international oil market,” Petron, the country’s largest oil firm said.
Other oil firms also cut pump prices namely Pilipinas Shell Petroleum Corp., PTT Philippines, Eastern Petroleum Philippines, Chevron Philippines, among others.
The oil firms have so far cut pump prices by P4.25 per liter for gasoline, P4.35 per liter for diesel and P4.90 per liter for kerosene for December.
Last December 2, the oil firms cut diesel by P0.50 per liter and kerosene by P0.75 per liter. There was no movement for gasoline.
On December 7, the oil firms cut gasoline by P2.50 per liter for gasoline and P2.25 per liter for diesel and kerosene
The oil firms also cut prices last December 14 by P1.90 to P1.80 per liter for kerosene, P1.75 per liter for gasoline and P1.55 to P1.60 per liter for diesel.
According to the Energy Department, diesel prices are now at P30.75 to P34.10 per liter while gasoline sells at the range of P39.60 to P45.70 per liter.
The department said that based on its monitoring, crude oil prices dipped further to as low as US$65 per barrel over concerns of weak demand and a glut in the supply of crude oil in the world markets.
Prices were further weighed down last week after the Organization of Petroleum Exporting Countries declined to cut production levels despite concerns of a slowdown in manufacturing activity in Europe and China.
Local oil industry players said international developments may result in oil stockpiling in anticipation of an eventual renewal in world oil price increases.
Fernando Martinez, president of Independent Philippines Petroleum Companies Association and Eastern Petroleum president, told reporters that while stockpiling may be an option, oil players are looking at the right timing to do so.
Martinez said oil companies are still determining whether world oil prices will decline further and until when.
“That would be part of my strategy but at the right timing. Analysis and information, that’s what we have to do. You do it at the right price. We may think that prices are now very low, but what if it will still go down. It’s market risk appetite,” Martinez said.
He said lower oil prices also lowered the cost of doing business in the country.
“The positive thing is the cost of doing business now is lower. This is the right time to maximize to either save or take advantage of the lower cost,” Martinez said, adding however that that joint industry stockpiling may not be feasible.
Analysts estimate that world oil prices may go bottom out to $40 per barrel before slowly coming back up again.
Oil prices rebounded sharply Friday from the prior day’s dives, despite concerns about abundant global supplies and weaker economies in Europe and China.
West Texas Intermediate for January delivery leaped $2.41 to close at $56.52 a barrel on the New York Mercantile Exchange, more than wiping out Thursday’s loss that hit a fresh five-year low.
Brent North Sea crude for February delivery, the international benchmark, settled at $61.38 a barrel in London, up $2.11 from Thursday’s closing level.
“I think the facts that have driven us to these five-years low are still the primary drivers on the market, those being the global oversupply and the (weakened) economic conditions in China and Europe that are curbing crude demand,” said Gene McGillian of Tradition Energy in a market note.
“But we are in temporary oversold conditions, and we’re heading into the final weeks of the year, and we see traders that are making profits on short positions.”
Oil has shed about half its value since June, and a decision in November by the Organization of the Petroleum Exporting Countries to maintain output levels despite falling prices has weighed on the market.
“The petroleum markets continue to chop sideways within the recent trading range, having located some buying interest at the fresh five-year lows reached this week,” said Tim Evans of Citi Futures.
For Evans, Friday’s rebound in part was a “simple portfolio rebalancing, with traders judging that there’s less downside risk and perhaps somewhat more upside potential from current levels, at least relative to where prices were at any point over the past six months.” With AFP