Pump prices rolled back today; gasoline by P1.40, diesel by P0.70

by Myrna Velasco February 15, 2016
http://www.mb.com.ph/pump-prices-rolled-back-today-gasoline-by-p1-40-diesel-by-p0-70/

After seesaw adjustments in the last two weeks, pump prices are back on the downtrend with the biggest rollback of P1.40 per liter implemented this week for gasoline products.

The oil companies also advised that diesel prices had been cut by P0.70 per liter; while the cost of kerosene products pared by P0.90 per liter.

The price reductions will be effective either 12:01am or 6:00 a.m. on Tuesday (February 16), according to the pricing advisories of the oil companies.

As of press time, the oil companies that already advised on their price rollbacks include Pilipinas Shell Petroleum Corporation, PTT Philippines and Phoenix Petroleum Philippines, Inc. and Eastern Petroleum Corporation.

The other players are expected to follow their competitors’ pricing lead as has always been the direction on a weekly basis.

Eastern Petroleum chairman Fernando L. Martinez has noted that the latest adjustment still reflects global price swings.

He primarily cited the prognosis of analysts that Iran will be injecting additional supply into the already-glutted world oil market.

Martinez quoted analysts that “Iran is going to add inventories,” and that in the United States, there have also been reported inventories of up to 500 million barrels more.

“Until there are significant cuts to output, the rally is not sustainable,” he stressed. Being a heavily import-dependent market, the Philippines just generally follows pricing trends in the global market.

Pump prices in the domestic market are adjusted on a weekly basis so they could be more reflective of cost trends both in regional and world pricing dynamics.

Meanwhile, in Singapore oil prices turned lower again Monday after soaring at the end of last week as Iran prepared to ship its first consignment of the commodity since sanctions were lifted, reigniting worries over a global supply glut.

At 0410 GMT, US benchmark West Texas Intermediate for March delivery was 20 cents or 0.68 percent lower at $29.24, while Brent fell 17 cents or 0.51 percent to $33.19.

Both main contracts soared more than ten percent Friday on a report that the OPEC producers’ club was open to on output cuts that could ease the global oversupply and drag prices up from more than 12-year lows.

The news provided some much-needed relief to the beleaguered asset, which has lost about three-quarters of its value since mid-2014 owing to the supply woes, overproduction, weak demand, and a slowing economy

However, another of the issues hanging over prices returned this week as Iran gets set to re-enter the market, after Western-imposed sanctions over its nuclear program were lifted.

“After a massive rebound in oil prices of well over 10 percent, traders are looking to take some of those gains off the table,” said Bernard Aw, market strategist IG in Singapore.

“The truth of the matter is that the supply glut still looms in the backdrop, especially with news of Iran loading its first cargo to Europe since sanctions ended. Put differently, any rebound, particularly the scale of Friday’s rally, is still an opportunity to sell.”