World oil prices decline
Wednesday, February 15, 2006
With a barrel, Lotilla expects price rollback
US crude oil stocks way above average
SINGAPORE (AP) — Oil prices continued to decline Tuesday amid expectations that a midweek U.S. supply report will show higher crude inventories.
Light, sweet crude for March delivery fell 29 cents to US.95 a barrel in Asian electronic trading on the New York Mercantile Exchange. The contract lost 60 cents Monday to close at US.24 a barrel, the lowest settlement this year.
In Manila, this prompted Department of Energy (DoE) Secretary Raphael Lotilla to predict at a Senate hearing that oil pump prices will be rolled back soon just days after oil companies raised them.
April Brent futures on London’s ICE fell 21 cents to US.41 a barrel.
Traders predicted the US Energy Department’s weekly petroleum supply snapshot due Wednesday would likely show climbing oil stocks for the seventh straight week.
US commercial crude oil stocks — already well above the average level for this time of year — are expected to gain another 1 million barrels in inventory data, according to the average of 10 analysts’ estimates in a survey conducted Monday by Dow Jones Newswires.
Traders remained concerned about the international dispute over Iran’s nuclear activities and to a lesser extent unrest in Nigeria, but oil futures have slipped since Friday on reports of lagging demand and bulging supplies.
The International Energy Agency, the Paris-based energy watchdog, reported falling demand due to high costs of crude.
"The price is completely oversold and has reached quite an important level now — US a barrel is a psychological support level, if we get more bearish information we may see another huge decline to US," said Tetsu Emori, chief commodities strategist at Mitsui Bussan Futures.
Emori said traders were watching gasoline demand and preparing to accumulate stocks as U.S. refineries started seasonal maintenance over the next three months, expected to limit supply of the fuel ahead of the peak demand summer driving season.
Nymex gasoline fell 0.52 cent to US.426 a gallon (3.8 liters) as energy analysts estimated an average rise in gasoline stocks of 1.5 million barrels last week, marking seven straight weeks of increases.
Distillate stocks, which include heating oil and diesel fuel, are expected to fall 500,000 barrels in government and industry petroleum-inventory data due Wednesday. Heating oil inched down marginally to US.6385 a gallon.
Lotilla sees rollback in petroleum prices
By JUDE GALFORD III
Expect a rollback in oil prices soon, a Department of Energy (DoE) official said yesterday, pointing out that prices of oil in the international market have gone down during the past few days.
During yesterday’s budget deliberations conducted by the Senate Committee of the Whole, Energy Secretary Raphael Lotilla said pump prices of oil products should be rolled back even as oil firms claimed they still needed to raise prices to recover earlier losses.
In a press conference last Monday, the country’s three biggest oil firms said they still needed to raise pump prices to recover losses of not less than one peso per liter on oil products sold during the past two months.
Lotilla, however, said that prices of oil products in the international market have dropped significantly and a rollback is warranted.
"The trend is firming up. The prices are going down internationally, so we look forward to the softening even of the local pump prices,’’ he told reporters.
Lotilla did not say by how much or when the rollback should take effect.
"We have our own computation," he said, adding that "it might be a happy weekend for everyone.’’
He said that the DoE would ensure that these oil firms conform to their computation.
Lotilla also said electricity costs in Luzon might go down in the first quarter of the year as it continues to enjoy a surplus in generated power.
Lotilla made the prediction even as senators questioned why the energy department had failed to privatize 70 percent of power generation assets as envisioned by the Electric Power Industry Reform Act or EPIRA.
Officials from the DoE, the National Power Corporation (NAPOCOR) and the Energy Regulation Commission (ERC) were present during yesterday’s hearings.
The DoE said Luzon could expect lower power rates by April this year, as power supply remains ample in Luzon.
However, Lotilla said the Visayas and Mindanao face a looming power crisis this year because of a lack in companies willing to invest in the power generation sector.
Energy officials said investors want to be assured of power contracts so they would have sure buyers of the electricity they will produce.
Without the assurance of power contracts, prospective investors don’t want to buy power generation companies of the NAPOCOR because they would be competing against government -generated power.
posted by philpower @ 9:52 AM,
