Taipei--Formosa Petrochemical Corp. (????), a privately owned fuel supplier, said on Saturday it will lower its domestic gasoline and diesel prices next week after crude oil prices in the U.S. market fell below US$50 per barrel overnight.
Crude oil prices faced downward pressure this week amid rising concerns over a global glut, offsetting optimism that the Organization of the Petroleum Exporting Countries (OPEC) and non-OPEC producers could extend a deal to cut output for another six months, analysts said.
For the week, Brent futures, the global benchmark, fell 2 percent in London, while U.S. crude futures ended down 2.2 percent.
The weakness in the global oil market prompted Formosa Petrochemical to announce a NT$0.5 (US$0.016) cut for gasoline per liter and a NT$0.6 drop for diesel per liter, effective from 1 a.m. on Monday.
The price decrease will largely offset the price increases of NT$0.6 per liter of gasoline and NT$0.7 per liter of diesel Formosa Petrochemical pushed through at the beginning of this past week.
The company adjusts its fuel prices on a weekly basis based on changes in global crude oil prices.
After this week's adjustment, prices at Formosa Petrochemical gas stations islandwide will fall to NT$21.5 per liter for super diesel, NT$24.2 per liter for 92 octane unleaded, NT$25.6 per liter for 95 unleaded and NT$27.7 per liter for 98 unleaded.
Sentiment toward the oil market turned cautious, in particular after the U.S. Energy Information Administration (EIA) reported on Wednesday that U.S. crude oil production rose to 9.25 million barrels per day in the week to April 14, up almost 10 percent since mid-2016, analysts said.
The higher daily production, alone with a spike in gasoline stocks in the U.S. market, raised fears of global oversupply and sent crude oil prices lower, analysts said.
The EIA data showed that gasoline stocks were up by 1.5 million barrels during the week, compared with a market expectations of a 1.9 million barrel drop.
The unfavorable leads in the U.S. market eclipsed expectations that a six-month deal to cut oil production between OPEC and non-OPEC producers, which took effect in January, will be extended.
These countries are scheduled to meet on May 25 to discuss an extension, with Saudi Arabia, the largest OPEC producers, having voicing support for the idea.
State-owned CPC Corp., Taiwan (??), the main competitor of Formosa Petrochemical, is expected to announce a similar price adjustment on Sunday, with the hike taking effect at midnight.
Source: Focus Taiwan News Channel