AFTER two consecutive weeks of increases, fuel prices are estimated to decline next week as the global market reacts to the recent developments in the Middle East, local oil industry sources said Friday.
They said diesel prices are seen to decrease by about P3.50 to P4 per liter, while gasoline prices could decline by about P0.25 to P0.75 per liter.
These estimates are based on the four-day trading Mean of Platts Singapore, which serves as the pricing basis for refined goods in Southeast Asia.
“Global prices declined this week as threatened US sanctions fell short of the market’s expectations and the economic pressure was viewed as a lower-risk path for physical supply than a military escalation, in turn reducing the oil market’s anxiety and easing immediate supply concerns,” a local oil industry source said.
“Prices were further pushed downwards by signals of a potential return to mediation to end the war and reopen the Strait of Hormuz after Iran said it had resumed talks with Oman, but supply disruption risks remain an issue as the market is still constrained,” the source added.
The source also noted that regional diesel and gasoline prices trended downward for the week due to supply increases from both India and China but said the reductions could be short-lived because of the constantly volatile developments in the Middle East.
“Regional prices of both diesel and gasoline declined because of rising refined products outflows from China due to renewed refined product export allowances, and also due to incremental flows from the US and India,” a local oil industry source said.
“Note, however, that world oil prices could rise after next week’s adjustments because of the latest reports that the US is not interested in returning to the ceasefire deal terms with Iran,” the source added.
This week, based on data from the Department of Energy, diesel prices increased by P2.31 per liter, while gasoline prices spiked by P1.08 per liter.
