Gasoline prices seen to increase this week

MANILA, Philippines–Oil firms are expected to raise gasoline prices this week of at least P0.25 per liter. This, sources said, was due to market jitters that linger on the possibility of escalating violence in Syria and Libya, which could disrupt product transport from neighboring oil producers.

The year-to-date net increase in gasoline and diesel rose to P3.24 and P4.08 per liter, respectively.

According to the Department of Energy (DOE), oil prices rose during the week on concerns about escalating violence in Syria and Libya, showing oil exports and production at the lowest levels since the 2011 civil war, and in Nigeria, where industrial-scale oil theft, sabotage and technical problems have dented output.

Still, market analysts have said that global oil inventories remain at healthy levels.

Since U.S. announcement that it is considering a military strike against Syria in response to the Assad regime’s use of chemical weapons, benchmark oil prices have increased by several dollars, as investors worry that possible violence in the region could harm oil production or shipments.

Market strategists have said that instability in the Middle East and the potential for increased volatility may put the risk on the upside for oil. Any prolonged disruptions to pipeline supply could send oil prices back to this year’s highs, it added.

For the products market in Asia, Platts noted that gasoline sentiment remains bearish as a surge in gasoline prices threatens to further weaken buying interest. Demand from Indonesia, the region’s largest gasoline importer, has tapered following the end of Ramadan, and traders said that the slump in the Indonesian rupiah versus the US dollar will further curb its appetite for imported gasoline.

Meanwhile, the high sulphur gasoil markets have not firmed much due to sluggish demand in Indonesia and Vietnam, and high stocks of 500 ppm sulphur gasoil in the Middle East. Though as of late August, cargoes for gasoil/diesel have been moving steadily out of India and South Korea for the Western markets.