After a brief hike last week, oil prices are rolled back beginning today as global crude prices softened due to lower demand caused by the new corona virus diseased-2019 (COVID-19).
According to the Department of Energy (DOE), the latest average Manila price per liter of gasoline (RON95) is at P50.22, diesel at P39.57 and kerosene at P42.76.
Shell and Seaoil reduced the prices of gasoline by P1.40 per liter, diesel by P1.60 per liter and kerosene by P1.65 per liter.
Phoenix also lowered the cost of gasoline by P1.40 per liter and diesel by P1.60 per liter.
The DOE said as of February 25, year-to-date adjustments stand at net decreases of P2.50 per liter for gasoline, P4.40 per liter for diesel and P5.59 per liter for kerosene.
Reuters reported that as of Thursday last week, Brent crude was down by 3.4 percent to settle at $51.61 a barrel, while West Texas Intermediate futures slid by 4.2 percent to end at $46.66 a barrel.
The report noted that global markets were spooked after the number of new COVID-19 infections outside China exceeded new Chinese cases for the first time, which investors say may cause a prolonged period of oversupply especially since the virus already spread to large economies including South Korea, Japan and Italy.
“Oil is in freefall as the magnitude of global quarantine efforts will provide severe demand destruction for the next couple of quarters… The first US case of unknown origin has energy markets preparing that a prolonged deep drop in demand for crude is upon us,” Edward Moya, senior market analyst at OANDA in New York, said in the report.
This development comes amid the possible deeper output cuts by the Organization of the Petroleum Exporting Countries and its allies including Russia which is set to meet this week to decide on the matter.
Consultants Facts Global Energy claim that oil demand would only grow by 60,000 barrels per day this year, a level which is “practically zero” due to the outbreak.
Likewise, Saudi Arabia, the world’s top oil exporter, is already reducing crude supplies to China in March by at least 500,000 barrels per day due to slower refinery demand following the outbreak.
