The Department of Energy (DOE) is closely monitoring movements in the international oil market as oil prices are showing signs of cooling in early trade on Wednesday.
The agency, according to Secretary Raphael Lotilla, observed a downward trend in petroleum prices. However, the trend may still vary as there are three more trading days for the week.
“But, of course, you know that it is volatile and we have to always be ready because we are already moving towards the winter months, normally prices will increase. We have to manage our expectations that this will continuously go down because there are a lot of external factors involved,” Lotilla said.
Last week, oil firms reduced pump prices after more than two months of price increases.
“Baka akyat-baba yung presyo dahil sa external factors. So we must continue to save on unnecessary trips outside of the house, let us use mass transport systems para maka-tipid tayo of these expenses,” added the energy chief.
Local oil firms adjust prices every week to reflect movements in the world oil market. Since the Philippines is a net oil importer, any spikes in international oil prices push up local pump prices.
The series of upward price adjustments in the past 11 weeks were triggered by global production cuts recently implemented by the Organization of the Petroleum Exporting Countries (Opec). Saudi Arabia and Russia have extended their oil export cuts by one million daily and 300,000 barrels per day, respectively.
Bloomberg reported last Tuesday that oil supplies from the Persian Gulf are set to tighten further as Oman and Bahrain expand refining capacity, consuming more regional crude to produce fuels like diesel for export.
The new Duqm refinery, a joint venture between Oman and Kuwait, has begun exporting the first cargoes of refined products, according to people familiar with the matter. Traders expect the 230,000 barrel-a-day facility to be running at full capacity by the start of next year.
Bahrain is also expanding its Sitra refinery, boosting the 87-year-old crude processing plant’s capacity to about 400,000 barrels a day from 267,000 a day now. With a report from Bloomberg News
Image credits: AP/Eric Gay