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Domestic fuel prices could fall next week

2015/10/16 20:10:59

Taipei, Oct. 16 (CNA) Fuel prices in Taiwan are expected to drop next week in the wake of a fall in international crude oil prices, amid lingering concerns over weakness in global demand, market sources said Friday.

The weakening global crude prices also reflect an increase in oil inventories at a time when the world's economy has shown signs of slowing, the sources said.

State-owned CPC Corp. Taiwan (中油) is likely to cut gasoline and diesel prices by NT$0.4 (US$0.01) and NT$0.5 per liter, respectively, next week after raising gasoline prices by NT$0.8 per liter and hiking diesel prices by NT$0.9 this week.

CPC calculates its fuel prices based on a weighted oil price formula that comprises 70 percent Dubai crude and 30 percent Brent crude to decide its weekly price adjustments.

International crude oil prices fell Thursday for the fourth consecutive session as traders took cues from a disappointing retail sales report released in the United States, the largest economy in the world, which pointed to lower-than-expected consumer spending, the sources said.

In September, retail sales in the U.S. rose only 0.1 percent, missing an earlier market estimate of a 0.2 percent increase, indicating that the country's economic growth remained unstable.

Fears over a weakening economy sparked fears over falling global demand for oil, while an increase in crude oil inventories dealt another serious blow to market sentiment toward the oil market outlook, they said.

A report released by the American Petroleum Institute two days earlier showed that oil inventories jumped by 9.3 million barrels in the past week.

Overnight, West Texas Intermediate crude November contracts in New York closed down 0.6 percent at US$46.38 a barrel, while November Brent crude in London dropped 0.9 percent US$48.71 per barrel.

CPC's weekly floating price formula showed that average oil prices stood at US$47.83 per barrel as of Oct. 15, down from US$49.07 seen in the previous week, according to its website.

If CPC implements the expected price cut next week, prices at the pump will fall to NT$21.0 per liter for super diesel, NT$23.2 per liter for 92 octane unleaded gasoline, NT$24.7 per liter for 95 octane unleaded and NT$26.7 per liter for 98 octane unleaded.

The state-owned oil company is scheduled to announce the price adjustments Sunday noon.

(By Lin Meng-ju and Frances Huang)