An economist--congressman is projecting oil price rollbacks every month until the end of the year.
“The supply deficit of global oil is narrowing, and supply is increasing at a faster rate than demand," Albay 2nd district Rep. Joey Salceda said in a statement Saturday afternoon, Sept. 3.
As a result of this supply and demand movement, the Committee on Ways and Means chairman expects "a rollback or net reduction in prices every month for the rest of the year for oil prices".
Salceda thus urged the government “to focus its efforts on agriculture, because there will still be some second-round effects on food prices, as agri input prices are still high although declining".
“The Filipino people, who are net buyers of oil from the world market, can expect some slight to moderate relief on oil prices as global oil supply-demand imbalance appears to be easing.
"July oil supply deficit narrowed to around 600,000 stock tank barrels, the lowest for the whole of 2022. Oil supply in July also grew by 0.28 percent but demand grew by just 0.07 percent,” he explained.
“With the US (United States)Federal Reserve maintaining its policy of gradual rate hikes, and with domestic pressure among US leaders to increase oil supply, as well as global adjustment to a stalemate in Ukraine, I expect net price reductions on oil prices every month for the rest of 2022. Oil futures data appears to say so, as well," the veteran lawmaker further said.
Salceda, a former investment analyst for global banks, says that he expects to see “something similar to the recovery post-Global Financial Crisis, when oil prices peaked in April 2011, before settling down by September the same year".
"I see it as possible that global crude prices could go below USD 80 for the first time by October this year. From there it will play between 80 and 95 until global tensions ease permanently," he projected.
“So, we can begin changing our mindset from oil prices to food prices, which is experiencing non-oil threats, such as climate," Salceda said.