By Myrna Velasco and Reuters
The country’s oil companies assured the public on Tuesday that there will be no disruption of supply despite the drone strike on the facilities of world’s biggest oil producer Saudi Aramco.
Leading oil firm Petron Corporation said “there will be no supply disruption from our end,” emphasizing that “we have adequate supply to support our domestic requirements.”
Pilipinas Shell Petroleum Corporation, for its part, said that while it has been saddened by the attacks on the Saudi oil installations, it is “exerting all efforts to ensure continuous supply of fuel to the motoring public and all our customers.”
After global prices surged nearly 20 percent in intraday trading following the Saudi Arabia oil attack, prices drop on Tuesday although the market remains on tenterhooks over the threat of a military response to attacks on the oil facilities that cut the kingdom’s output in half and sent prices soaring by the most in decades.
The Saturday attack raised the prospect of a major supply shock in a market that in recent months had focused on demand concerns due to the erosion of global growth amid the ongoing US-China trade dispute. Saudi Arabia is the world’s top oil exporter and has been the supplier of last resort for decades.
Brent crude was down 30 cents, or 0.4 percent, at $68.72 a barrel by 0631 GMT, and West Texas Intermediate was down 57 cents, or 0.9 percent, at $62.33 a barrel. Earlier, the crude benchmarks both fell by around 2 percent.
Monday’s price surge was the biggest jump in almost 30 years, before closing nearly 15 percent higher at four-month highs.
“It’s not a great thing to say, but if something like this is going to happen, at least it happened at a time when there is a surplus in crude and US production is growing at such a fast clip,” said Tony Nunan, Tokyo-based oil risk manager at Mitsubishi Corp.
US oil output from seven major shale formations is expected to rise by 74,000 barrels per day (bpd) in October to a record high 8.843 million bpd, the US Energy Information Administration said in its monthly drilling productivity report on Monday.
Still, a gauge of oil-market volatility on Monday rose to the highest level since December of last year, and trading activity showed investors expect higher prices in coming months.
Equities and other markets were also pressured on Tuesday.
Japan said on Tuesday it would consider a coordinated release of oil reserves if necessary.
US President Donald Trump said on Monday it looked like Iran was behind attacks on the Saudi oil facilities but stressed he did not want to go to war. Tehran has rejected the charges that it was behind the drone strikes.
Locally, the Department of Energy (DOE) said “it is still premature at this moment to say that Saudi Aramco incident would have an adverse impact on the country,” hence, it is keeping its action for now on just monitoring the situation.
Energy Secretary Alfonso G. Cusi also said he has yet to meet with the oil companies “to look into the sufficiency of inventory levels.” The meeting is targeted today, September 18.
At this stage, the Energy department is already anticipating that price hikes by September 24, which is the routine movement for costs at the pumps.
The DOE said “the impact to prices, if any, may be felt by Tuesday next week. That is, if there will indeed be an adverse impact. To date, the DOE reiterates that the impact of the incident is still premature.”
Based on DOE’s end-2018 data, the country has been sourcing 33.7 percent of its oil requirements from Saudi Arabia – and is in fact the biggest supplier for the Philippine market.
The rest of supply procurements had been from Kuwait, 26.3cpercent; United Arab Emirates, 20.7 percent; Russia, 7.4 percent; and Qatar, 4.9 percent. Smaller suppliers include Nigeria, Oman, South Korea, Taiwan, Indonesia, Malaysia, Singapore, and Brunei.