MANILA, Philippines — Oil firms raised prices for the second week in a row over lingering supply concerns.
Petron and Seaoil said in separate advisories that they implemented price hikes of P1.15 per liter for gasoline and kerosene, and P1.50 for diesel, from 6 a.m., Tuesday (Feb. 17). Shell implemented the same price adjustments from 12:01 a.m. on the same day.
These adjustments reflected movements in the international oil market, they said.
Minor oil players such as TOTAL and Phoenix Petroleum raised gasoline and diesel prices at similar rates from 6 a.m. on Tuesday (Feb. 17). Most minor or “independent” oil players do not sell kerosene products.
Other oil firms such as Chevron, Eastern Petroleum, and Flying V have not made official announcements but are expected to implement similar price hikes.
The price hikes for the second straight week trimmed the total year-to-date adjustments in the Philippines to a net decrease of P0.05 for gasoline and P0.75 for diesel.
It may be recalled that on February 10, 2015, most oil companies implemented price increases by P2.40 per liter for gasoline, P1.90 per liter for diesel, and P2.15 per liter for kerosene.
Industry observers earlier predicted price hikes of P1 or more as the international market remains spooked by shrinking exploration budgets of oil majors and decreasing deployment of U.S. oil drilling rigs in recent weeks.
Analysts, however, say such cutbacks have not translated to cuts in production and the real effect would be at least a year or two from now, when existing shale oil wells dry up and new ones don’t get created fast enough to keep supply steady.
Concerns of violent uprising disrupting Iraq’s output were also cited.
Iraq was the second-leading contributor to global oil supply growth in 2014 after the U.S. and was the leading producer among oil exporting countries.
However, Iraq’s oil fields halted production in the third quarter of 2014 due to attacks led by the rebel group ISIL (The Islamic State of Iraq and the Levant).
The attacks have been quelled but the ISIL threat remains, according to the U.S. Energy Information Administration.
The Philippine Department of Energy’s Oil Monitor said that recent price spikes of about $6 to $9 a barrel in crude and products prices raised questions on whether the market has found a bottom to the sell-off that began in June and has entered its eighth month.
For gas, oil/diesel, fundamentals in the Asian market reportedly remain largely unchanged, characterized by poor demand in the region and plentiful supply streaming out from North Asia, according to the DOE.
Some traders believe that market fundamentals remained unchanged, with ample gasoline supplies still stuck in Southeast Asia — making the case for
an overall decrease in oil price for the full year, despite recent short-term price rallies.