Taipei--Domestic gasoline and diesel prices are expected to trend higher next week following an increase in international crude oil prices this week, although disappointment over the extension of an oil output deal capped the upturn in crude prices to some extent, market sources said on Friday.
The continued gains posted by international crude oil prices could prompt state-owned CPC Corp. Taiwan (??) to raise its gasoline prices by NT$0.2 (US$0.07) to NT$0.3 per liter and diesel prices by NT$0.3 per liter next week.
It would be the second consecutive week CPC, the largest oil supplier in Taiwan, has hiked its domestic fuel prices.
CPC is scheduled to announce its prices for next week at noon on Sunday and put them into effect 12 hours later.
If CPC adjusts its fuel prices for the coming week as forecast, prices at the pump will rise to NT$21.8 per liter for super diesel, NT$24.1-NT$24.2 for 92 octane unleaded gasoline, NT$25.6-NT$25.7 for 95 octane unleaded and NT$27.6-NT$27.7 for 98 unleaded, the sources said.
Overnight, international crude oil prices plunged about 5 percent as energy traders expressed dissatisfaction with an extension of the current oil production cut between the Organization of Petroleum Exporting Countries (OPEC) and non-OPEC producers into 2018, sources said.
According to the new deal, which was inked at a meeting held by the oil producers in Vienna on Thursday, the on-going six month output cut deal, which will expire in June, will be extended to March 2018 as the market had previously anticipated.
However, the new deal failed to meet market expectations of a deeper cut from the current 1.8 million barrels a day, which disappointed many energy traders who remained concerned over a supply glut, the sources said.
Before the Vienna meeting, international oil prices had received support from optimism about a possible deeper reduction from the current level. In addition, crude prices had also moved higher after the latest report from the U.S. Energy Information Administration on Wednesday, which indicated a larger than expected drop in oil inventories in the U.S. market last week.
According to the EIA report, crude oil inventories in the U.S. market fell 4.4 million barrels in the week to May 19, beating the market's earlier forecast of a 2.4 million-barrel drop. It was the seventh consecutive week crude stockpiles in the U.S. have fallen.
CPC calculates its weekly fuel prices based on a weighted oil price formula made up of 70 percent Dubai crude and 30 percent Brent crude.
Due to the rise in international crude oil prices, CPC has calculated the average price of crude oil at US$52.89 per barrel this week, up from NT$51.28 per barrel a week earlier, according to its website.
Source: Focus Taiwan News Channel