AFTER a wave of increases, fuel prices are projected to drop next week as the global market reacts to the volatile situation in the Middle East, local oil industry sources said on Friday.
They said diesel prices will roll back by about P0.50 to P1 per liter, and gasoline by about P1 to P1.50 per liter.
These estimates are based on 4-day trading of Mean of Platts Singapore, the pricing basis for refined goods in Southeast Asia.
“After Brent crude surged above $100 per barrel last week due to an expanded threat to Middle East crude supplies, prices initially weakened at the beginning of the week as cautious optimism over the US-Iran truce outweighed geopolitical risk. However, as supply risks remained high due to still-limited flows from the region through the Strait of Hormuz, prices once again surged over the next few days as tensions escalated after the resumption of airstrikes. Dwindling US oil inventories also added to supply worries,” a source said.
“However, further price increases were tempered after a proposed coalition to boost maritime defense around the Red Sea, to be led by Saudi Arabia, received the support of 14 Arab states,” the source added.
“But despite the development, refined products prices did not fall as quickly because of the tight supply previously mentioned. As a result, both diesel and gasoline products face further potential supply tightness and could remain volatile as geopolitical tensions continue to disrupt regional refinery operations,” the source added.
This week, diesel prices spiked by P7.30 per liter, while gasoline prices jumped by P6.80 per liter.
