Oil prices seen to rise by P1.20/L next week

MANILA – Prices of oil are expected to increase by as much as PHP1.20 per liter next week based on movements of the benchmark and the foreign exchange.

In a commentary Friday, Jetti Petroleum president Leo Bellas said the price of diesel is projected to rise between PHP0.60 and PHP0.80 per liter and gasoline by PHP1 to PHP1.20 per liter.

“Prices of crude oil and refined fuel products have strengthened this week on worries that Russian supplies could be disrupted due to increased aggression in the Russia-Ukraine war,” he said.

Bellas explained that “the intensified attacks by Ukraine on Russia’s ports and refineries have already impacted Russian supplies, and rising concerns of a broader escalation of the tension in the Middle East are also supporting prices.”

This factor is further aggravated by higher diesel demand in Northern Hemisphere countries as autumn season nears, he said.

The higher demand and the supply constraints due to damage in Russian refineries and export facilities have tightened the supply outlook, he said.

Bellas also noted that “while gasoline demand indicators continue to weaken, operational issues in major refineries have affected gasoline trade flows and the upcoming refinery turnarounds are expected to tighten supply.”

“However, demand worries due to signs of slowing US economy are pressuring prices and offset supply concerns. A larger-than-expected rise in the US distillate stockpiles raised concern about demand in the world’s top oil consumer,” he added.

Domestic oil prices have been on the rise for a month now, with this week's price upticks ranging between PHP0.10 and PHP0.50 per liter. (PNA)