Oil Prices Seen Dropping Up to PHP5/Liter Amid Diplomatic Hopes
Domestic oil prices are expected to decrease by as much as PHP5 per liter next week, according to Jetti Petroleum president Leo Bellas. The forecast is based on market developments up to August 6 and reflects the situation in the Middle East.
The decline in oil prices is attributed to renewed hopes of a diplomatic breakthrough to the US-Iran conflict, which has eased the geopolitical risk premium despite lingering uncertainty and persistent risks to Red Sea shipping.
Bellas noted that crude oil prices decreased, resulting in a sharp drop in both diesel and gasoline prices in Asia. The stronger Philippine peso this week against the US dollar also put downward pressure on domestic prices.
While fundamentals remain relatively firm due to strong demand amid tightening supply, further downside is capped due to concerns over tightening global supply pool as Russian product outflows continue to decline.