Cost increases in gasoline products in the world market resulted in an anticipated price hikes for petroleum products in the country by as much as P1.50 to P1.65 per liter this week.
Oil firms will be applying the said changes in prices tomorrow, March 19, according to the conventional cost movement practice of the deregulated oil industry.
One of the factors that continues to trigger an increase in the oil prices is the geopolitical aspect, such as the continuous enforcement of sanctions on Venezuelan oil exports, as well as the supply strain on Middle East producers, particularly Iran.
However, industry experts said that the increase in prices may not last long due to forecasts of global economic slowdown, as well as the remarkable oil production increase of the United States.
The rise of US oil exports will provide a wide choice of market destination, specifically in Asia.
International Energy Agency (IEA) Executive Director Fatih Birol said in a Manila Bulletin report that US production is expected to climb significantly to as high as 13.72 million barrels per day in the next five years as compared to the current 2.78 million barrels/day, the bulk could be the start for export to Asia as a key landing market.
According to the IEA chief, the uprise in production will be triggered by the Permian basin’s output; jumping to 5.5 million barrels per day in 2024 or approximately double from last year’s 2.62 million barrels per day.
IEA added that export of crude form the US Gulf Coast could grow as much as 5.1 million to 8.4 million barrels per day in five years from the 2018 level of 4.9 million.
Birol said the world oil demand may gradually decrease due to weakening economic figures, such as the key markets of India and China in Asia.
“There is no peak demand on the horizon,” he was quoted as saying in the report.
US Permian basin was noted to have “nearly 41,000 new wells and US$308 billion in upstream spending between 2018-2023″will drive its output growth to the targeted 5.5 million barrels per stream day in the next five years.
The Permian region’s productions was seen to have grown far more than any other country in the world since 2017.
“Stunning level of growth will comprise more than 60-percent of net global production growth during that time frame,” as assessed by IHS Markit.
Higher oil output being injected by the US into export market could calm the immediate price hikes, which could save the countries relying on importing from near-term financial issues.