Taipei, Sept. 3 (CNA) Fuel prices in Taiwan are expected increase next week after a recent technical rebound in international crude oil prices, but concerns over a supply glut remained in place, market sources said Thursday.
State-owned CPC Corp. Taiwan (中油) is likely to raise gasoline and diesel prices by of NT$1 (US$0.03) per liter next week, after this week's drop of NT$0.7 and NT$0.8 per liter respectively, to a seven-month low.
The CPC calculates its fuel prices based on a weighted oil price formula, which comprises of 70 percent Dubai crude and 30 percent Brent crude.
International crude oil prices have recovered this week on technical factors, the sources said. On Wednesday, West Texas Intermediate crude for October delivery rose 1.8 percent to US$46.25 a barrel on the New York Mercantile Exchange, while Brent climbed 1.9 percent to US$50.50 a barrel on ICE Futures Europe.
As a result, CPC's weekly floating price formula stood at US$48.11 as of Sept. 2, up from US$43.87 the previous week, according to its website.
The latest domestic fuel price forecasts were made largely on the recent movement of crude oil prices but may change as there is still some uncertainty over the global oil market and concern about oversupply, according to the sources.
They said market sentiment remained weak toward the major global economies, particularly China after it reported a contraction in manufacturing activity in August.
Weaker demand in China, the world's second biggest economy and one of the major consumers of oil, could result in higher global inventories and a supply glut, the sources said.
Pierre Andurand, founder of the hedge fund Andurand Capital, forecast earlier this week that international crude oil prices would trend lower again, falling below US$30 per barrel.
If CPC implements the projected increases next week, prices at the pump will rise to NT$21.1 per liter for super diesel, NT$23.4 per liter for 92 octane unleaded gasoline, NT$24.9 per liter for 95 octane unleaded gasoline and NT$26.9 per liter for 98 octane unleaded gasoline.
CPC is scheduled to announce the price adjustments for next week on Sunday at noon.
(By Lin Meng-ju and Frances Huang)
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