Oil firms eye more than 12 per liter fuel roll­back

Manila Bulletin - - Front Page - By MYRNA M. VE­LASCO

Pump prices will be rolled back again this week by more than 12 per liter for gaso­line prod­ucts.

This was based on the pro­jec­tions of oil com­pa­nies, which are also eye­ing less than 12 per liter roll­back on diesel, and

11.60 to 11.70 per liter price re­duc­tion on kerosene.

This will be the fifth week that re­duc­tions had been im­ple­mented on petroleum prices, ow­ing it gen­er­ally to the con­tin­ued down­swing in world mar­ket prices.

De­spite the en­force­ment of sanc­tions against Iran last Novem­ber 4, mar­ket an­a­lysts noted that prices hit multi-month lows due to con­flu­ence of fac­tors – but all point­ing to a well-sup­plied oil mar­ket.

In par­tic­u­lar, the Paris-based In­ter­na­tional En­ergy Agency

(IEA) re­ported sky­rock­et­ing pro­duc­tion of the United States in the week end­ing on Novem­ber 2, reach­ing a scale of 11.6 mil­lion bar­rels per day.

Rus­sia’s pro­duc­tion as well as that of Saudi Ara­bia had also been on record highs – with these mar­kets ramp­ing up pro­duc­tion rather than pur­su­ing out­put cuts at this point.

In last week’s trad­ing, bell­wether Dubai crude plunged to the US$69 per bar­rel level; while Brent crude dropped sharply to the US$70 per bar­rel mark. WTI (West Texas In­ter­me­di­ate) bench­mark of the US mar­ket plum­meted to as low as US$60 per bar­rel.

The last weeks had been highly fa­vor­able de­vel­op­ments for heavy oil im­port­ing coun­tries like the Philip­pines, but it re­mains to be seen how longer this will last given prog­no­sis that sup­ply crunch may again jolt mar­kets in the com­ing months.

As the mar­ket took a re­verse track from the US$80-US$85 per bar­rel price level it al­ready hit in Septem­ber, sig­nals are be­ing sent anew that Rus­sia and pro­duc­ers un­der the Or­ga­ni­za­tion of the Petroleum Ex­port­ing Coun­tries (OPEC) may again ce­ment a deal on the im­po­si­tion of new pro­duc­tion quo­tas for fresh round of mar­ket re­bal­anc­ing next year.

Just as when world oil pro­duc­ers were al­ready fore­cast­ing climb in oil prices to the US$100 per bar­rel next year, US pro­duc­tion came to the res­cue and al­tered the price prog­nos­ti­ca­tion of its coun­ter­part-pro­ducer mar­kets.

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