Dipstick on oil prices

Last June, Energy Secretary Jericho Petilla cited forecasts by oil companies that the price of crude in the world market would steadily rise in the next three months to peak at about US$70 per barrel by this September.

At this juncture, we invite readers to look at this article’s accompanying chart which tracks the July-September prices of crude oil traded at Nasdag. The chart shows how wrong the forecasts cited by Petilla were.

Instead of increasing, crude oil prices plummeted from below US$65 per barrel nearing the end of July to rest at below US$40 per barrel in late August. In fairness to Petilla, he admitted in June that he was really at a loss whether crudes prices were heading north or south.

Now as you read this, the prices of gas, diesel and liquefied petroleum gas (LPG) have increased in the Philippines by as much as P2 per liter with oil companies claiming that in the past week the US financial condition brightened up, thereby increasing demand for oil and causing a spike in its price.

Indeed that spike in crude prices can be seen in the chart in the first week of September, rising from below US$40 per barrel in late August to rest at just below US%50 per barrel last week. The good news is that crude prices started dropping again this week to rest at US$46 per barrel at the close of trading at Nasdaq.

If this downward trend continues, then our dipstick tells us that we can expect rollbacks anew in the prices of gas, diesel and liquefied petroleum gas in the coming weeks. Cross your fingers.-End-

Image by: Nasdaq