By MYRNA VELASCO
Pump prices are on mega-rollback again this week with the cost of diesel cut by P2.00 to P2.10 per liter; and gasoline and kerosene products by P2.00 per liter.
Early birds in announcing the price cutbacks were Pilipinas Shell Petroleum Corporation and PTT Philippines, which both enforced heftier price reduction for diesel at P2.10 per liter vis-à-vis the P2.00 per liter of competitors; and followed the P2.00 price rollback trend for gasoline at P2.00 per liter. This will be effective 6 a.m. on Tuesday (December 4).
Another oil company that already sent notice on price reductions was PetroGazz at P2.00 per liter for both gasoline and diesel, effective also on Tuesday. The rest of the industry players are anticipated to follow.
The string of price reductions at Philippine oil pumps is still attributed to the unremitting price crash in the world market reminiscent of the 2014 collapse of the oil industry.
Based on the monitoring report of the Department of Energy (DOE), the niggling trade war between China and the United States mainly triggered the dip in international prices.
But the price downtrends may hit countervailing pace in the coming weeks with a planned fresh round of “market rebalancing” underpinned anew by proposed cutbacks in production to be led by the Organization of the Petroleum Exporting Countries (OPEC) and its Russian ally.
Market developments are closely being watched at the weekend G20 summit of the world’s biggest economies where the United States and China agreed on Saturday to suspend any new tariffs in their escalating trade war.
In terms of oil supply-demand balance, the Paris-headquartered International Energy Agency (IEA) recently reported that the US has been continuously flooding the market with increased inventories, in fact, it went up by 3.6-million barrels last week alone. In sum, US crude inventory stands at 450.5-million barrels.
“The commercial crude inventory is now about 7.0 percent higher than the five-year average for this time of the year and has risen for 10 consecutive weeks,” a DOE report stipulated.
The energy department similarly quoted offshore news reports that “oil prices are expected to trend lower despite output cut talks by Saudi Arabia and other countries to balance oil markets.”
As of end-Friday trading last week, the WTI crude reference of the US market plummeted to the level of US$50 per barrel level; while the crude basket of OPEC was still at a soft level of US$58.09 per barrel.