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MANILA, Philippines—The oil companies are again rolling back the prices of major fuel products amid continuing weakness in the international market.
Petron and Shell said in separate advisories the price cuts — 0.35 per liter for gasoline and P0.20 per liter for diesel — were to be implemented at 2:01a.m. October 28.
Phoenix Petroleum was to implement similar adjustments at the same time, reflecting the continued decline in the prices of refined petroleum products in the world market.
Other oil firms have not made official announcements but were expected to implement similar adjustments since most fuel products in the country are either imported or refined from imported materials.
The latest price cuts would bring total year-to-date adjustment in the price of gasoline to a net decrease of P5.48 per liter and a net decrease of P7.20 per liter for diesel.
Even with geopolitical risks in areas such as Iraq, where sectarian fighting has threatened fuel routes, the global oil market is awash with supply, with North America experiencing an energy boom.
The Organization of the Petroleum Exporting Countries has cited North America as the main reason for non-OPEC supply growth this year. The US Energy Information Administration said weekly petroleum inventories show that commercial crude inventories increased by 5 million barrels for a total US commercial crude inventory of 361.7 million barrels.
Even so, Saudi Arabia has said it would not mind seeing oil prices fall to $80 per barrel from the present level of around $90 per barrel and the previous highs of around $100.
A recent OPEC study showed that supply growth is projected to overtake that of oil demand.
At the same time, global commodity prices remain weak in emerging markets and in Europe. Even gold prices have been wallowing around the $1,200 per ounce level, which is much lower than the $1,800 high of 2011.
Deflation is also a concern as dropping oil prices may hamper stimulus efforts in recovering economies. In general, dropping oil prices tend to create declining prices elsewhere.
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