Domestic fuel prices forecast to drop next week

2017/03/17 12:24:53 fontsize-small fontsize-default fontsize-big
Domestic fuel prices forecast to drop next week

Taipei, March 17 (CNA) Domestic gasoline and diesel prices are expected to fall next week as international crude oil prices in the U.S. market have remained below US$50 a barrel, market sources said Friday.

Crude oil prices have also been affected by lingering worries over a supply glut, which is expected to prompt state-owned CPC Corp. Taiwan (中油) to cut its domestic fuel prices by NT$0.7 (US$0.02) per liter for next week, the sources said.

If the price cut is implemented as expected, it will be sharpest in about four months and the second consecutive weekly decline.

The state-run oil supplier reduced its gasoline and diesel prices by NT$0.3 and NT$0.4 per liter, respectively, this week.

CPC is scheduled to announce its prices for the next week at noon Sunday and put them into effect at midnight.

If they're adjusted as forecast, prices at the pump will fall to NT$21.5 per liter for super diesel, NT$23.9 per liter for 92 octane unleaded gasoline, NT$25.4 per liter for 95 octane unleaded, and NT$27.4 per liter for 98 unleaded, the sources said.

CPC calculates its weekly fuel prices based on a weighted oil price formula comprised of 70 percent Dubai crude and 30 percent Brent crude.

On Thursday, West Texas Intermediate crude futures fell 0.2 percent to close at US$48.75 per barrel in the U.S. market, while Brent futures, a global benchmark, shed 0.1 percent to end at US$51.74 per barrel.

The drop followed a rebound the previous day as a result of an unexpected decline in oil inventory in the U.S. market, but concerns over a global oversupply continued to haunt energy traders.

Although data from the U.S. Energy Information Administration (EIA) showed that oil inventories in the U.S. market fell by 237,000 barrels in the week ending March 10, the total inventories remained high at around 528 million barrels.

The high inventories raised concerns over the global supply, quenching optimism over a cut in production by the Organization of Petroleum Exporting Countries (OPEC) and non-OPEC members since January,

On Monday, international crude oil prices closed at the lowest in more than three months as U.S. oil companies moved to boost production.

Due to the lower international crude oil prices, the CPC formula yielded a crude oil price of US$50.11 per barrel as of March 16, down from US$53.14 the previous week, according to the company's website.

(By Huang Li-yun and Frances Huang)
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