Further oil price cuts uncertain despite supply glut
The looming oversupply of oil in the global market can further bring down local fuel prices, but analysts expect persistent geopolitical tensions to still spark price hikes.
Oil prices suffered a drop on Monday of over $1 per barrel after the Opec+ (Organization of the Petroleum Exporting Countries and allies led by Russia) decided to ramp up their production despite demand uncertainties.
Rodela Romero, assistant director of the Department of Energy-Oil Industry Management Bureau, told Inquirer that if the market continues to see “more supply and weaker demand, trading would definitely be affected.”
Oversupply concerns from last week, initially stemming from the higher crude inventories of the United States, already led to lower fuel prices in the Philippines for the first week of May.
Local oil companies on Monday announced that motorists can see as much as a 90-centavo per liter price cut in petroleum products.
Given the recent development, Jetti Petroleum president Leo Bellas said this week’s prices of crude oil and refined fuel products were likely to be lower.
Trade war
However, it remains unclear if Filipinos would continue to enjoy cheaper fuel prices for much longer.
“It’s too early to confirm that prices could drop further,” the Jetti Petroleum official told Inquirer in a separate interview.
“Factors such as de-escalation of the trade war between the United States and China, Middle East tensions, including tight diesel and gasoline flows in the region due to ongoing refinery turnarounds, may influence price direction to the upside, putting a floor on prices,” Bellas added.
