By Myrna Velasco
For the second weekend this month, Phoenix Petroleum Philippines Inc. is kicking off big-time rollback in petroleum prices by a scale of P1.30 per liter for its variety of gasoline products.
Phoenix Petroleum advised that its price cuts will be effective 12 noon on Saturday (May 11), leading to anticipations then that all of its industry competitors will follow until Tuesday (May 14). No price cuts had been announced for diesel products.
The company was also the price cutback trendsetter last week, with it even enforcing heftier rollback of P1.00 per liter for gasoline products versus the P0.90 per liter implemented by industry rivals.
The downtrend in per-liter costs of fuel at the Philippine pumps is still attributable to the softening prices in the world market – with market dynamics hinting of a possible price crash when global producers break free from ‘production freeze market rebalancing’ strategy.
Prior to these cuts in pump prices, the Department of Energy (DOE) monitoring showed that gasoline prices in Metro Manila had been hovering at P46.50 to P62.66 per liter; and diesel at P40.70 to P49.59 per liter. Kerosene products, on the other hand, have been ranging from P46.00 to P55.80 per liter.
In the global market, the Dubai crude which is the reference pricing for Asian oil markets, swayed back to the US$69 per barrel level; while international benchmark Brent crude was at US$70 per barrel.
The focus of market speculation that has been influencing price fluttering has been on the likely decision of the Organization of the Petroleum Exporting Countries (OPEC) and the Russian-led alliance of oil producers when they meet in Vienna next month.
Market watchers and analysts are projecting an end to the ‘production cuts’ scheme that the alliance of OPEC and non-OPEC producers had been enforcing since 2015 when oil markets first experienced unwarranted plummeting in prices.
In the coming weeks though, it is anticipated that global prices could be placed under new threats over escalations in the trade dispute between the United States and China; the expectation of at least 1.0 million barrels per day reduction in Libya’s oil output; and the menace that could arise from United States’ attack threats on oil tankers in the Persian Gulf due to its flared up conflict with Iran.
Geopolitical factors are the intervening facets that could trigger wild swings in prices because they could adversely impact on the flow of oil supply to markets.