Oil cools, but pump price risks linger

Motorists could see another week of mixed pump price adjustments as easing global oil prices compete with lingering geopolitical risks that continue to cloud the market outlook.
An industry source said initial estimates based on the first four days of Mean of Platts Singapore (MOPS) trading and foreign exchange averages point to a P0.70-per-liter rollback to a P1.20-per-liter increase for diesel prices next week.
Gasoline prices, meanwhile, could fall by P0.50 per liter or rise by as much as P1.50 per liter.
If the forecast holds, diesel prices could range from P59.55 to P81.65 per liter, while gasoline could range from P65.10 to P104.20 per liter, depending on the fuel grade and retailer. Actual pump prices will vary across oil companies.
Reacting to the market movement, Jetti Petroleum President Leo Bellas said crude prices have eased as supply concerns moderated following the interim peace agreement between the United States and Iran and the gradual recovery of oil shipments through the Strait of Hormuz.
"World crude oil prices have eased down, despite the tempered optimism over the US-Iran interim peace deal and ongoing negotiations, on improving broader supply outlook as physical flows through the Strait of Hormuz gradually recover, and the return of disrupted Middle Eastern barrels as Gulf producers ramp up production," Bellas said.
He added that the sanctions waiver allowing Iranian crude oil and other petroleum products back into the market has further improved the global supply outlook.
The softer crude market has weighed more heavily on diesel prices.
"Asian diesel and middle distillates price benchmarks are relatively weaker as the market is expecting a gradual rise in regional availability. Refiners have been maximizing distillate output, and the prospect of a fresh wave of supply of Middle Eastern crude is seen to pressure diesel and middle distillate prices," Bellas said.
Gasoline, however, continues to draw support from resilient demand despite improving supply conditions.
"Despite the political agreement, physical flows through the Strait and shipping activity have yet to normalize. Uncertainty still remains over the durability of the US-Iran accord. The recent incident of a suspected attack on a cargo vessel in the Strait of Hormuz has reignited fears that the preliminary deal would not hold," he said.
