11/liter oil price rollback set

But oil market on alert over sanctions on Iran

Pump prices of petroleum products will have a heftier rollback of 11 per liter for diesel, and 11.10 per liter for gasoline products this week.

As of press time, the oil companies that already sent notices on price cuts were independent players Eastern Petroleum Corporation, Petro Gazz, and Phoenix Petroleum Philippines, Inc.

The reduction in per-liter costs took effect at 6 a.m. on Sunday (November 4) for Phoenix Petroleum; while Petro Gazz and Eastern Petroleum would start its rollback at 6 a.m. today, November 5.

The rest of the industry players are anticipated to follow this week’s downtrend in prices; although in recent weeks, the bigger players often enforce lower price rollbacks.

This week in particular, Pilipinas Shell Petroleum Cor-

poration is implementing a smaller price reduction of 11.00 per liter for gasoline; 10.90 per liter for diesel and 10.65 for kerosene – effective 6 a.m. on Tuesday (November 6).

It is widely anticipated that global oil prices will be on the downtrend for the rest of the year as more supply would be injected into the market, hence, it is seen as a positive development for heavily importing countries like the Philippines and its Southeast Asian neighbors.

International Energy Agency (IEA) Executive Director Fatih Birol, in an exclusive interview, noted that world oil producers are already discussing prospects of feeding markets with more supply.

He acknowledged that prices at just below US$80 (14,283) per barrel are still seen high for most countries – especially for economies that have been trending downwards on their respective growth trajectories.

“Today, the price is close to US$80, still high for many oil importing countries/ economies like the Philippines. So we are in discussion with many oil producers to bring more oil to the market as high prices are not good for the global economy,” Birol said.

He added that easing international oil prices will be critically relevant “especially at this time that economic growth momentum is slowing down.”

The IEA executive thus expressed hope that prices “will be at reasonable level and not-so high as what we have been seeing in recent months.”

On the well-anticipated enforcement of sanctions against Iran this November, it will be worth observing how prices will be shaping at that time and onwards.

But Birol inferred prices may not necessarily swing back to the higherthan-US$80 per barrel level that had jolted markets in recent months.

In the last three weeks, prices have been continuously trailing downward, hence, pump prices were also generally on rollback mode.

Oil market on alert LONDON – US sanctions against importers of Iranian oil threaten the crude oil market’s precarious balance and risk surging prices, all under Saudi Arabia’s watchful gaze, according to experts.

“In the next weeks all eyes will be on Iranian exports, whether there will be some cheating around US sanctions, and on how quickly production will fall,” said Riccardo Fabiani, an analyst for Energy Aspects.

The US will from Monday target buyers of Iranian oil in order to deprive Tehran of its main source of income.

Going after Iran’s oil money will hit Tehran where it hurts, but it also means hitting a major pillar of the global oil market – Iran is the OPEC cartel’s third-largest producer – with major consequences for world supply.

Iran exported the equivalent of 2.5 million barrels a day in April, before the announcement of sanctions turned buyers away.

“Even if the United States grants exemptions, Washington will demand that the volume imported from Iran be significantly reduced,” said UBS analyst Giovanni Staunovo, who expects prices to rise.

Exemptions

However, oil prices have fallen by nearly $15 in less than a month, after peaking in early October at their highest level in two and a half years, with a barrel of Brent at over $85 (14,550).

Part of the explanation lies in the ambiguous position of the US, which initially insisted that the sanctions were designed to reduce Iranian exports to zero barrels, but has since has softened its position.

Secretary of State Mike Pompeo on Friday announced exemptions for eight countries, without naming them.

Turkey indicated that it was one of them and analysts believe that India, one of the world’s largest importers, is also on the list, which will be published on Monday.

Saudi Arabia, the world’s largest exporter, has claimed that it can respond to the Iranian shortfall, but some market players are wondering whether the kingdom is exhausting its capacities.