Oil price rollback of up to P5/liter expected in PH next week

Domestic oil prices will likely decrease by as much as PHP5 per liter next week, given market developments as of Thursday, reflecting the situation in the Middle East.

Jetti Petroleum president Leo Bellas, in a message to reporters Friday, said diesel and gasoline prices are both forecast to decline by PHP4.50 to PHP5 per liter.

“Oil price(s) retreated as renewed hopes of a diplomatic breakthrough to the US-Iran conflict eased the geopolitical risk premium, despite the lingering uncertainty and persistent risks to Red Sea shipping,” he said.

Bellas said crude oil prices decreased, resulting in a sharp drop in both diesel and gasoline prices in Asia “as easing geopolitical risks reduced the recent supply premium.”

“The stronger (Philippine) peso this week against the US dollar helped put more downward pressure on domestic prices,” he added.

Amid the latest oil price rollback, Bellas noted that “fundamentals remain relatively firm due to strong demand amid tightening supply as the continuing disruption to Middle East exports through the Strait of Hormuz and from Saudi Red Sea ports limit the availability of feedstock for Asian refiners.”

“Further downside is capped due to concerns over tightening global supply pool as Russian product outflows continue to decline,” he said. “Continued supply disruptions and conflicting political statements from the US and Iran are keeping prices volatile, with increasing upside risk.”

Fuel prices declined between PHP0.60 and PHP2.10 per liter this week. (PNA)