MANILA – Fuel prices are expected to decline in the coming weeks due to expected oversupply amidst geopolitical risks, an official of the Department of Energy (DOE) said Tuesday.
Citing reports of the International Energy Agency (IEA) on its 2026 outlook released last November and the US Energy Information Administration, DOE Oil Industry Management Bureau Director Rino Abad, in a Bagong Pilipinas Ngayon interview, said the two agencies forecast an oversupply of oil by next year.
Abad said oil prices have been on a downtrend in the last two weeks, and there is a big chance this will continue vis-a vis the projection of oversupply in the first quarter of 2026.
He, however, cited two major risks namely the geopolitical issues between Russia and Ukraine and the economic issues in Venezuela.
He said the Russia-Ukraine conflict has resulted in sanctions by the US and Europe, thus, the forecast of JPMorgan that around 1.4 million barrels of oil per day are not being released from Russia.
He said IEA earlier forecasted that around three to 4 million barrels of oil supply in the first quarter next year may be at risk due to the impact of the Russia-Ukraine conflict.
Amidst this factor, Abad said there is a general forecast that the higher supply of oil in the first three months of next year will persist.
He said speculations that the sanctions against Russia will be implemented result in an uptick in prices even with supply remaining high, but this is not sustained since the fundamentals are not affected.
This week, only gasoline prices were adjusted, up by PHP1.20 per liter, and Abad said they are still determining why this is happening.
“So, what we can do is really go to the trend of the crude oil saka natin ina-apply sa (before we can apply this on the) finished product,” he said, adding that the real changes is based on the movement of the crude oil prices. (PNA)