Trade deal, sanctions to push oil prices higher
Gasoline, diesel and kerosene prices may rise next week due to ‘renewed concerns over supply disruptions following US President Trump’s sanctions on Russia and Iranian oil,’ and improved demand prospects after the US-EU trade deal.
Photo courtesy of pna
Local pump prices are expected to increase next week due to fresh concerns over global supply disruptions and renewed hopes of stronger economic activity following international trade developments.
“Based on the four-day trading, we are expecting an increase in the prices of petroleum products by next week,”Department of Energy’s Oil Industry Management Bureau director Rodela Romero said on Friday.
The DoE estimated that the price of gasoline may rise by around P1.50 per liter, diesel by about P1.00 per liter, and kerosene by roughly P0.80 per liter.
Romero said the projected adjustments reflect movements in the global oil market, particularly “renewed concerns over supply disruptions following US President Trump’s sanctions on Russia and Iranian oil.”
Improved demand prospects
She added that there is also optimism over improved demand prospects “after the US-EU trade deal.”
Separately, Jetti Petroleum Inc. president Leo Bellas said diesel prices continue to strengthen week-on-week as supply tightens, while a bigger-than-expected decline in US gasoline stocks has supported expectations of strong summer driving demand.
“The oil markets responded positively following the trade deal between the US and European Union, while the threat of US sanctions on Russia and buyers of Russian oil has also helped support oil prices this week,” Bellas said.
He projected that diesel prices may increase by around P0.80 to P1.00 per liter and gasoline prices by P1.50 to P1.70 per liter next week.
Peso depreciation against the dollar
Bellas noted that the depreciation of the peso against the US dollar also contributed to the higher price average this week compared to last week.
However, he also flagged some downward pressure on crude, pointing to “tariff threats, uncertainty surrounding countries yet to negotiate a trade deal with the US, and the delay in the cutting of interest by the US Federal Reserve.”
Early this week, fuel retailers raised pump prices of diesel by P0.60 per liter and kerosene by P0.40 per liter, while cutting gasoline prices by P0.10 per liter.
Last week, companies implemented increases of P0.40 per liter for gasoline, P1.10 for diesel, and P0.70 for kerosene.