Industry insiders see P2 oil price hike
FILE PHOTO
MANILA, Philippines – Pump prices might increase more than initially thought, industry sources said, citing updated market reports.
The first major upward adjustment for 2015, sources said, could be “around P2.” This is slightly more bullish in terms of pricing than the estimated range of P1 to P2 as of the weekend.
As speculative trading wound down last week, industry sources placed the increase at P2 per liter on gasoline and about P1 to P1.50 per liter for diesel.
To date, total fuel price adjustments have so far resulted in a net decrease of P3.60 per liter for gasoline and P4.16 per liter for diesel since the start of the year.
Speculative trading drove prices up, a source said, on weak U.S. economic data and concerns that oil-drilling activities would be lessened. Oil majors have been cutting capital expenditures for 2015, raising output concerns.
Violence in Libya, an OPEC member and home to Africa’s largest oil reserves, also supports price hikes. The perception of strong demand from China due to a relaxation of its reserve requirements could be another factor for price hikes, another source said.
Last week, Asian benchmark Dubai crude grew by an average of $7.50 per barrel over the previous week. For February, Dubai crude is so far
averaging $52 per barrel versus the January average of $45.50 per barrel – a 14 percent increase.
The benchmark MOPS (Mean of Platts) gasoline gained last week on reports of possible strikes in several U.S. refineries ahead of the summer driving season. MOPS was up by $8.50 per barrel from the previous week’s average.
Reports said that, for February, gasoline has been averaging almost $66 per barrel versus January’s full-month average of just over $57 per barrel. Diesel in Asia, meanwhile, grew an average of $6 per barrel from the previous week, supported by lower stockpiles in Japan and demand from other Asian countries ahead of maintenance turnarounds at several refineries.
Besides international price trends, other factors affect local pump prices, including taxes and foreign exchange rates.
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