Taipei--Domestic gasoline and diesel prices are likely to move higher next week, reflecting a spike in international crude oil prices, in particular after U.S. President Donald Trump ordered a missile strike against Syria, market sources said on Friday.
Geopolitical tensions offset concerns about a global supply glut, which may prompt state-owned CPC Corp. Taiwan (??) to raise its gasoline and diesel prices by NT$0.6 (US$0.02) per liter next week.
CPC is scheduled to announce its prices for next week at noon on Sunday and put them into effect at midnight.
If CPC adjusts its fuel prices for the coming week as forecast, prices at the pump will rise to NT$21.9 per liter for super diesel, NT$24.3 per liter for 92 octane unleaded gasoline, NT$25.8 per liter for 95 octane unleaded and NT$27.8 per liter for 98 unleaded, the sources said.
Earlier on Friday, Trump ordered a cruise missile attack against a Syrian air base controlled by President Bashar al-Assad's forces in response to a deadly chemical attack in a rebel-held area.
With news of the air strike, U.S. West Texas Intermediate (WTI) crude futures in New York climbed by over 2 percent at one point, while Brent crude futures, the global benchmark, also gained 1.6 percent.
Before the military action, international crude oil prices remained solid in the week since a supply outage at a field in the United Kingdom's sector of the North Sea, the sources said.
In addition, the effective coordination of Organization of the Petroleum Exporting Countries (OPEC) and non-OPEC oil producers to cut output helped assuage energy traders' fears over oversupply caused by an increase in oil inventories in the U.S. market.
The U.S. Energy Information Administration reported an increase in oil inventories. The agency reported an increase of 1.6 million barrels in stockpiles for the week ending March 31 to keep total stockpiles above the five-year average.
Meanwhile, a weaker Taiwan dollar has also made oil imports more expensive, which is likely to cause CPC to push up fuel prices next week, the sources said. Before the currency's continued weakness on Friday, the Taiwan dollar depreciated 0.74 percent against the U.S. dollar over the past two days.
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 a spike in international crude oil prices, CPC has calculated the average price of crude oil at US$52.39 per barrel as of April 6, up from NT$50.33 per barrel a week earlier, according to its website.
Source: Focus Taiwan News Channel