Panayam kay DOE Oil Industry Management Dir. Rino Abad kaugnay sa price adjustment sa mga produkto ng petrolyo ngayong linggo
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00:00Price adjustments of oil products this week,
00:03we will find out together with the Oil Industry Management Bureau Director, Rino Abad
00:08of the Department of Energy.
00:10Director Abad, good afternoon to you.
00:13Good afternoon to your program and to our countrymen.
00:19Sir, there is a growing price hike in oil products this week.
00:25How much is expected to be raised by our countrymen and motorists?
00:32Well, there are some pronouncements.
00:34We saw that the gasoline will reach P85 per liter,
00:43the diesel is around P1.75 per liter,
00:49and the kerosene is P1.90 per liter.
00:54So those are the adjustments.
00:58When is this, Director Abad?
01:01This is expected tomorrow morning, Tuesday around 6 a.m.
01:09So this is effective, not yet, but tomorrow morning.
01:15We still have time, Joey, to load before it rises,
01:19especially the diesel, it's high, it's P1.75.
01:23What is the reason for these price adjustments in the price of oil products?
01:29Ma'am Nina, in our last interview,
01:34since April, the global market is more balanced,
01:43around 102 million barrels per day.
01:47The reason is, OPEC Plus removed the oversupply in the first month of this year,
01:56which is around 2.2 million barrels per day.
01:59Since it's too tight, we expect, in our last interview,
02:06we said that the price of oil products will be very volatile.
02:12Every week, the price will swing depending on the reports involving oil.
02:20This is the highest and lowest price we have experienced until now.
02:26In fact, last week, the rollback was due to a disappointing report.
02:33OPEC Plus will return the 2.2 million barrels
02:39from October this year until the end of September next year.
02:44But that's just at the onset of sentiment.
02:49Now, the correction of the market is returning because there's nothing actual.
02:57In terms of fundamental volume of supply, nothing has changed.
03:01Supply is at 102 million barrels and consumption is almost the same.
03:07We will be expecting, probably at the end of September,
03:11unless there are other factors that will affect the oil,
03:15we will be expecting that our price on a weekly basis will be volatile.
03:21It means it will go up and down. We cannot be sure of the trend.
03:27You mentioned the volatility, Director.
03:31We cannot say if it will go up or down.
03:35But what are the factors that will affect the price next week or next month?
03:44The major factors, Sir Joey, first of all is OPEC Plus.
03:52There is a decision to go out.
03:54We will wait until October if they will return.
04:00Partly because the 2.2 million barrels that were removed will be spread out.
04:06It will be slow to return for one year.
04:09So that's the number one fundamental factor that can affect the supply.
04:15Second is the interest hike or interest cut.
04:20Recently, the U.S. promised that they will review this month, in June.
04:27It happened last week, but the decision was to retain the status quo
04:32and the next review will be scheduled on December.
04:38For now, the fundamental factors, we don't have...
04:42Japan is waiting, so probably that will make the difference in the coming days because the review is in June.
04:51But ultimately, those two factors, part of the U.S. is big and they are not finished.
04:59It will be very volatile, Sir Joey.
05:04It depends on the non-fundamental factors that can affect, like inventory buildup in China and the U.S.
05:15So these are temporary cases.
05:17We will be expecting temporary cases that will affect the price on a weekly basis.
05:23Director Abad, the supply and demand of oil in big countries today, you mentioned U.S., China.
05:32How is their supply and demand today?
05:37Well, the situation of the U.S., if we remember, in the month of May, there was an inventory buildup,
05:46meaning their consumption decreased.
05:50But then again, it recovered in the beginning of June.
05:54It's the same in China. The importation was weak in May,
05:59but again, the consumption is slowly recovering and increasing in June.
06:06These are temporary cases. These are not fundamental in nature.
06:12What is fundamental is the supply, which is usually controlled by the OPEC plus,
06:19and the interest rate setting that is being done by the European Central Bank, U.S., China and big countries like Japan.
06:30So again, there is no change recently in the U.S.
06:34The next review is in December.
06:36Japan will be expecting that something will happen in June, but we don't know what they will release.
06:44So for the meantime, what I can say is that these are temporary issues that will affect the price,
06:50and that will be on a weekly basis.
06:52Director, will this volatility affect trading in the coming weeks?
06:59You said that we cannot say if there will be a further increase or rollback.
07:07But what will be the effect of this on trading in general?
07:12Well, on trading in general, sir Joey, when you look at the reports of Global Plots, for example Mackenzie,
07:23the range of crude oil price is always increasing from the range of USD 80 to USD 90.
07:33Now we are at USD 82, which is the bottom of that range.
07:38But then again, because we are there, fundamentally nothing will happen.
07:48So probably we will remain at this range.
07:51It would be better if we are always at the bottom 80, 80 to 83, 84.
08:00That will maintain our price and prevailing price at the level of USD 60 for diesel.
08:06USD 57 to USD 60 almost for gasoline.
08:13Probably our kerosene is at USD 72.
08:17So that will be the prevailing for the coming weeks.
08:21Again, let's talk about the entry of October because there is the decision of OPEC Plus to return.
08:28And the changes that will be made to the interest rate of the U.S., probably the European Central Bank will also accompany that,
08:36maybe in December.
08:38So for now, we are in that range, from USD 80 to probably USD 84 per barrel.
08:45It looks like we are volatile in that range.
08:49All right.
08:50Please remind our countrymen, especially motorists, who are watching us right now.
08:58Well, this is a little bit of a new normal because the last time, probably four years ago,
09:06the even out of supply demand, probably also at that time, was at 98 million barrels per day.
09:17Even out, but our price, domestic price, brought about also by the crude oil price, is in the range of USD 60 per barrel, USD 60 to USD 70.
09:29But now, the new normal is at USD 80 to USD 90.
09:32So it's a little bit higher.
09:35But of course, we're still happy.
09:37Way back, probably two months ago, we were at USD 90 and now we're down to USD 82.
09:45So we are also happy that even if it's a new normal high, USD 80 to USD 90,
09:53at least we're at the bottom of USD 80 to USD 84.
10:01All right.
10:02Thank you very much for your time, Oil Industry Management Bureau Director Rino Abad of the Department of Energy.
10:09Good afternoon to all of you.