Taipei--Domestic gasoline and diesel prices are expected to move higher next week, with benchmark 95 octane unleaded to rise above NT$25 (US$0.83) per liter after international crude oil prices staged a rebound this week, market sources said Friday.
Concerns over a potential global supply glut eased somewhat after hopes that major producers will extend a deal to cut output sent international crude oil prices higher this week. As a result, state-owned CPC Corp. Taiwan (??) is expected to raise gasoline prices by NT$0.50 per liter and hike diesel prices by NT$0.6 per liter next week, the sources added.
This week, CPC left its domestic fuel prices unchanged, taking the mixed global oil market into account.
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$21.5 per liter for super diesel, NT$23.9 for 92 octane unleaded gasoline, NT$25.4 for 95 octane unleaded and NT$27.4 for 98 unleaded, the sources said.
International crude oil prices made a strong comeback this week as energy traders hailed a possible extension of the six-month production cut deal between the Organization of Petroleum Exporting Countries (OPEC) and non-OPEC producers into 2018, the sources added.
Such optimism was sparked after energy ministers from the world's two biggest producers -- Saudi Arabia and Russia -- jointly said on Monday that the output agreement, which took effect in January, will be extended into March next year, the sources said.
The OPEC members and non-OPEC nations have scheduled a meeting for May 25 and both Saudi Arabia and Russia expect the extension will be officially announced then to further lower oil supply worldwide, according to the sources.
In addition, a report released by the U.S. Energy Information Administration which pointed to a sixth consecutive weekly decline in U.S. crude inventories also gave a boost to crude prices, which rose to their highest in three weeks, the sources said.
According to the EIA report, crude oil inventories in the U.S. market fell 1.8 million barrels for the week to May 12, while gasoline stockpiles also declined by 400,000 barrels in the week.
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 spike in international crude oil prices, CPC has calculated the average price of crude oil at US$51.03 per barrel this week, up from NT$48.67 per barrel a week earlier, according to its website.
Source: Focus Taiwan News Channel