Marginal hike in oil prices seen
MANILA, Philippines — Oil prices may increase slightly this week amid lingering supply concerns despite signals the US transport sector might be taking a hit.
Industry sources said prices might increase by an amount below P0.50 (50 centavos) per liter. Some gave more specific forecasts, saying diesel might increase P0.20 (20 centavos) to P0.25 (25 centavos) per liter while gasoline may chalk up an increase of P0.15 (15 centavos) per liter. Others said gasoline and diesel would both increase “by P0.15 to P0.30 per liter.”
Continuing concerns of a potential oil supply disruption in Europe have been driving oil prices. Traders have been saying that escalation in tensions between Russia and the Ukraine could push the U.S. and European Union to sanction Russia’s economic interests, which are dominated by energy trade.
It has also been reported that civil unrest disrupted production and shipments from Libya, the holder of Africa’s largest crude reserves and a member of the Organization of Petroleum Exporting Countries.
Consumer sentiment declined as retail and entertainment giant Amazon reported lower profit amid rising shipping costs and car company Ford delivered 39 percent less profit in the first quarter. The drop in Ford sales in the U.S. in particular signaled that consumer spending on transportation in the world’s top fuel consuming economy might not remain as strong as expected.
Meanwhile, the Department of Energy’s Oil Monitor said Platts saw sentiment in the Asian gasoline market would remain supported on limited supply in the region from refinery turnarounds, which also prompted some importers to seek additional barrels.
There were also concerns China might export more diesel amid weak domestic consumption due to a slowing economy.
“Adding to this, demand is expected to climb ahead of Muslim fasting month Ramadan, which begins late June this year,” according to the report.
Excluding the anticipated price adjustment this week, the year-to-date total adjustments stand at a net decrease of P0.35 per liter for diesel and a net increase of P0.65 per liter for gasoline.
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