Oil firms will implement a mix of rollbacks and increases on pump prices this week as an anticipated strong oil price rally failed to materialize.
PTT Philippines has announced it will implement a 50-centavo rollback per liter of diesel and an increase of 50 centavos per liter on gasoline starting on Tuesday, May 26, at 6 a.m.
Other oil firms have not made formal announcements but are expected to implement similar adjustments.
Including this week’s price movements, gasoline prices have had a net increase of P4.97 per liter and for diesel, P1.51 per liter since January 2015. Household LPG remained at a net decrease of P4.60 per kilogram.
Last week, most of the oil companies implemented an increase of 35 centavos per liter for gasoline and 15 centavos per liter for diesel.
The recent uptick in oil prices has fed expectations of a price rally, but actual price hikes have yet to reflect this.
It appears that oversupply is still prevalent, or at least enough to overwhelm demand.
Unconventional resources like the Alberta oil sands and US shale help keep up a historic increase in supply. Reports said that even amid low prices, there might be a small increase in global oil output this year, largely due to more efficient operations of producers.
Commerzbank noted that the US oil rig count fell by just 11 last week, the smallest decline since early April, and came as some key petroleum basins saw the first rise in the weekly rig count all year.
Meanwhile, oil output from oil producing countries was little changed in April, only dropping 1,000 barrels to 31.295 million barrels a day.
The EIA estimates oil production will reach 9.2 million barrels of oil per day (mopd) for 2015 from 8.7 mopd in 2014.
Demand does not seem to be growing fast enough to gobble up extra supply.
The Department of Energy’s Oil Monitor report said China, the world’s second top energy consumer, did not show enough promise in April to drive oil demand despite easier monetary policy.
China’s National Bureau of Statistics (NBS) said that growth in retail sales, a key indicator of consumer spending, fell to 10.0 percent in April, the weakest in nine years, the report said.
This, as growth slowed sharply in Germany, Europe’s biggest economy, to 0.3 percent from 0.7 percent during the first quarter, the report said.