NOTING the global oil supply imbalance has been shrinking rapidly and supply is expanding faster than demand, Albay District II representative Jose Maria Clemente ‘Joey’ Salceda disclosed he is expecting monthly oil price reductions for the remainder of the current year.
This would be welcome news to most Filipinos, especially the transport sector, who have been reeling from the adverse effects of the spate of price increases in pump prices that has triggered inflation and an economic downturn never felt before the onslaught of the global coronavirus pandemic.
According to Salceda, “with the US Federal Reserve maintaining its policy of gradual rate hikes, and with domestic pressure among US leaders to increase oil supply, as well as global adjustment to a stalemate in Ukraine, he foresees net price rollbacks on oil prices every month for the rest of 2022.
The economist-lawmaker, who also heads the House Ways and Means Committee, added that as net oil purchasers in the world market, the country can expect slight to moderate relief in oil prices even as he cited that the July oil supply deficit was at its lowest level for 2022 at about 600,000 stock tank barrels. “While the demand only increased by 0.07 percent in July, oil supply increased by 0.28 percent,” he pointed out even as he likewise underscored that something similar could happen to the recovery post-Global Financial Crisis, when oil prices peaked in April 2011, before settling down by September the same year.
“I see it as possible that global crude prices could go below US$80 for the first time by October this year. From there it will play between 80 and 95 until global tensions ease permanently,” he clarified.
Meanwhile, the Albay solon expressed agreement in the Marcos administration’s policy of focusing its efforts on agriculture because there would still be some effects on food prices, as agriculture input prices are still high, although declining. “September will be very critical. Planting season for rice starts. Some milling of sugar is already happening. And corn domestic supply is supposed to begin narrowing this month, as planting takes place next month,” he enthused.
