Gas price cut by 11.15/liter, diesel by 10.90 today

Given the continuing downward swing in the global prices, oil companies cut the pump prices of gasoline by 11.15 per liter, diesel by 10.90 and kerosene by 10.85 per liter effective 6 a.m. today.

As of press time, Pilipinas Shell Petroleum Corporation, PTT Philippines, Seaoil, Flying V, Total, Phoenix Petroleum, Chevron and Eastern Petroleum already announced price cuts. The rest of the industry players are expected

to follow as the usual course of business in the sector.

Cost swings in the world market headed downhill last week, especially for Dubai crude which is generally taken as the price benchmark for Asian oil markets.

The price fall subsequently reflected also in the Mean of Platts Singapore (MOPS), which is the cost indexing reference for oil importers in the Philippines.

The downtrend in prices had been immediately reversed on Friday (June 22) following the announcement of the Organization of the Petroleum Exporting Countries (OPEC) and its alliances led by Russia to increase production levels.

The proposal was to hike output by 1.0 million barrels per day, but that was tentatively placed at 600,000 barrels per day because oil producer countries cannot agree yet on the actual volume that they could boost into their production.

For import-dependent countries like the Philippines, this is a temporary relief, and market narrative may change again next week depending on how prices will behave in the international market.

Raise output Brent crude oil prices fell over 1.5 percent on Monday as traders factored in an expected output increase that was agreed at the headquarters of the Organization of the Petroleum Exporting Countries (OPEC) in Vienna on Friday.

Despite this, analysts said global oil markets would likely remain relatively tight this year.

Brent crude futures were at $74.22 per barrel at 0455 GMT, down 1.8 percent from their last close.

US West Texas Intermediate (WTI) crude futures were at $68.42 a barrel, down 0.2 percent, supported more than Brent by a slight drop in US drilling activity and a Canadian supply outage.

Prices initially jumped after the OPEC deal was announced late last week as it was not seen boosting supply by as much as some had expected.

OPEC and non-OPEC partners including Russia have since 2017 cut output by 1.8 million barrels per day (bpd) to tighten the market and prop up prices.

Largely because of unplanned disruptions in places like Venezuela and Angola, the group's output has been below the targeted cuts, which it now says will be reversed by supply increases, especially from OPEC leader Saudi Arabia. Although analysts warn there is little space capacity for large-scale output increases.

"Saturday's OPEC+ press conference provided more clarity on the decision to increase production, with guidance for a full 1 million bpd rampup in 2H18," Goldman Sachs said in a note on Sunday.

"This is a larger increase than presented Friday although the goal remains to stabilize inventories, not generate a surplus," the US bank added. (With a report from Reuters)