Taipei, June 23 (CNA) Domestic gasoline and diesel prices are expected to trend lower next week for the fourth consecutive week, a reflection of continued weakness in international crude oil prices this week, market sources said on Friday.
Although crude oil prices bounced back overnight from a 10-month low in the previous session amid lingering concerns over a global supply glut, crude was still cheaper than a week earlier.
As a result, state-run CPC Corp. Taiwan is expected to cut domestic fuel prices by NT$0.3 (US$0.0099) per liter next week, which will push diesel prices down to the NT$20 mark per liter, the sources said.
The announcement is expected to be made at noon on Sunday and go into effect 12 hours later.
The expected cut will come after CPC lowered domestic gasoline prices by NT$0.2 per liter and diesel prices by NT$0.3 per liter this week to an almost seven-month low.
If CPC adjusts its fuel prices for the coming week as forecast, prices at the pump will fall to NT$20 per liter for super diesel, NT$22.5 for 92 octane unleaded gasoline, NT$24.0 for 95 unleaded and NT$26.0 for 98 unleaded, the sources said.
Despite the rebound in global crude prices on Thursday, many energy traders remain wary of rising production in Libya and Nigeria, which are exempted from an output reduction agreement reached by the Organization of Petroleum Exporting Countries (OPEC) and non-OPEC producers, the sources said.
Increased output by Libya and Nigeria raises fears over worsening global oversupply, which could undermine the current output cut accord, which OPEC and non-OPEC producers agreed in May to extend from June 2017 to March 2018, the sources said.
Market statistics show that oil production In Libya rose more than 50,000 barrel per day (bpd) to 885,000 bpd after the state oil company settled a dispute with Germany's oil supplier Wintershall Holding.
Although oil inventories in the U.S. market fell last week, supply glut fears continued to weigh on market sentiment, pushing crude prices lower, the sources said. According to the U.S. Energy Information Administration, crude inventories in the U.S. market dropped by 2.7 million barrels last week, topping an earlier market estimate of 2.1 million. However, the data only lent brief support to crude prices, 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 fall in international crude oil prices, CPC has calculated the average price of crude oil at US$44.82 per barrel this week, down from NT$46.43 per barrel a week earlier, according to its website.
