Minor price cuts for fuel this week

OIL PRICES declined moderately this week as bullishness to the anticipated production cuts by the Organization of the Petroleum Exporting Countries (Opec) waned.

Petron and Shell on Monday announced a rollback of 15 centavos per liter for gasoline, 60 centavos per liter on diesel, and 40 centavos per liter on kerosene effective 6 a.m. today.

In an advisory,  Seaoil said it was reducing prices of gasoline by 15 centavos per liter, diesel by 60 centavos per liter, and kerosene by 40 centavos per liter.

Phoenix Petroleum Philippines and PTT Philippines announced price cuts of 15 centavos per liter for gasoline and 60 centavos per liter for diesel effective 6 a.m. today. Both do not sell kerosene.

Including the latest adjustment, prices of major fuel products will have risen by 22 centavos per liter for gasoline and 60 centavos per liter for diesel.

Other oil firms had not made formal announcements as of press time but are expected to follow suit.

Most of the country’s fuel products are from imported sources, which mean distributors are subjected to similar price factors such as international oil prices, foreign exchange rates, taxes, and logistics.

There have been various price rallies since the start of 2016 but none of them seem to go beyond the $40 to $43 per barrel range. Despite periods of bullishness that drive prices up, prices have remained relatively stable since the market is still fundamentally oversupplied.

Talks of Opec cutting production at the urging of some members have made prices spike now and then since January but until now, no concrete steps have been taken for the group to curb output in order to drive prices up.

Major members such as Saudi Arabia are seen to be treading carefully since too-low prices are hitting Opec economies but at the same time, prices above $45 per barrel may revive shale oil operators in the US that had folded in recent months. If that happens, there will may be another round of oversupply and price crashes, which would only prolong the problems of traditional petroleum producers.

Retail oil prices in the Philippines are set weekly, largely directed by international trading the week before.

Oil prices fell Monday as talks of production cuts seem to have lost steam while US output remains high and concerns remain of whether economic growth in Asia would be enough to drive up demand.