Domestic fuel prices forecast to drop next week

Taipei--Domestic gasoline and diesel prices are likely to fall next week as international crude oil prices had dropped below US$50 mark per barrel Thursday, market sources said Friday.

With the drop in crude oil prices amid worry over a supply glut, the state-owned CPC Corp. Taiwan (??) is expected to cut its gasoline and diesel prices by NT$0.1 (US$0.003)-NT$0.2 per liter next week after leaving them unchanged this week, the sources said.

CPC is scheduled to announce its prices for the next week at noon 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 fall to NT$22.4-NT$22.5 per liter for super diesel, NT$24.7-NT$24.8 per liter for 92 octane unleaded gasoline, NT$26.2-NT$26.3 per liter for 95 octane unleaded, and NT$28.2-NT$28.3 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, crude oil prices in the United States fell below US$50 per liter for the first time this year as market sentiment has been affected by oversupply concerns due to higher oil inventories in the U.S. market, the sources said.

Oil stocks in the U.S. increased by 8.2 million barrels last week to a record 528.4 million barrels, according a report Wednesday by the U.S. Energy Information Administration (EIA).

Furthermore, oil production in the U.S. market is expected to rise to 9.7 million barrels per day next year compared with 8.9 million barrels per day in 2016, the EIA said, causing greater worry among energy traders, according to market sources.

The increase in inventory and the forecast rise in production in the U.S. have eroded optimism toward this year's efforts by the Organization of the Petroleum Exporting Countries and non-OPEC producers to cut output, the sources said.

Source: Focus Taiwan News Channel