Domestic fuel prices may rise for 2nd straight week

Taipei--Domestic gasoline and diesel prices are expected to move higher for a second straight week next week as international crude oil prices continued to rebound on reduced concerns of a supply glut, market sources said Friday.

A bigger than expected drop in U.S. crude oil inventories last week sent oil prices higher, which should lead state-run oil refiner CPC Corp. Taiwan to increase domestic oil prices by NT$0.5 (US$0.016-NT$0.6 per liter next week, the sources said.

That would push its benchmark 95 octane unleaded gasoline closer to NT$25 per liter.

CPC raised its domestic fuel prices by NT$0.3 per liter this past week.

If CPC adjusts its fuel prices for the coming week as forecast, prices at the pump will rise to NT$20.8-NT$20.9 per liter for super diesel, NT$23.3-NT$23.4 for 92 octane unleaded gasoline, NT$24.8-NT$24.9 for 95 octane unleaded gasoline and NT$26.8-NT$26.9 for 98 octane unleaded gasoline, the sources said.

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 increase in international crude oil prices, CPC calculated the average price of crude oil at US$48.10 per barrel this week, up from NT$45.96 per barrel a week earlier, according to its website.

Concerns of a supply glut were eased after the U.S. Energy Information Administration (EIA reported Thursday that crude oil stocks in the U.S. fell by 6.3 million barrels last week, far exceeding the 2.3 million barrel fall forecast.

In addition, U.S. gasoline inventories declined 3.7 million barrels for the week, higher than an expected drop of 1.1 million barrels.

The rise in crude oil prices was limited, however, by higher production in the U.S. market, the sources said.

U.S. oil production rose about 1 percent to 9.34 million barrels per day, the EIA data showed. U.S. oil output has increased more than 10 percent since mid-2016, the data showed.

Source: Overseas Community Affairs Council