MANILA, Philippines — World oil prices have tumbled to lowest levels following a rapid seven-week sell-off after the US Intermediate Crude and the International Brent Crude registered a record-high in nearly four years.
Analysts have earlier voiced out concerns that oil producers are churning out more oil than the world needs, weighing down oil prices.
According to the Department of Energy, low oil prices due to feared oversupply are good for fuel importing countries but this poses risks to oil-producing countries like Iran and other nations in the Middle East.
“Maganda in the sense na nagmumura ang presyo ng petroleum products pero kung alam mo naman ang OPEC countries ang kanilang binebenta ay petroleum products so hindi nila pababayaang sumadsad so lagi nilang binabalanse ang merkado para patuloy pa rin ang kanilang business,” said DOE Oil Industry Management Bureau Assistant Director Del Romero.
Fears of oversupply, coupled with the bleak world economic outlook released by the International Monetary Fund for 2018 and 2019, have prompted the organization of the petroleum exporting countries to meet on December 6 to discuss possible production cut.
OPEC has been worried that some of its inventory will not be used due to overproduction.
With the plan to slash production volume, DOE says this might result in higher oil prices in the coming weeks.
“Kapag nangyari ang December 6 na meeting baka makaapekto ‘yun so, hopefully kung makaapekto man, hindi ganun ang pagtaas ulit,” said Romero.
The DOE, meanwhile, assures to continue inspecting gasoline stations that are selling fuel at a very low price, adding that these stations passed the standard quality and quantity test and that the implementation of lower prices is just due to market competition.
“Kung may pagdududa, sabi nga natin may power of choice; bumili ka kung saan talaga kampante ka, alam mo mura na siya at the same time maganda pa yung kalidad pero kung may duda sila sabihin sa Department of Energy para ma-inspect,” said the assistant director.
DOE also notes that the local oil industry is deregulated, meaning oil firms have the liberty to set domestic prices based on the movement of prices in the World Market. — Mon Jocson | UNTV News & Rescue