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Formosa Petrochemical to cut fuel prices next week

2017/08/19 20:38:35

Taipei, Aug. 19 (CNA) Formosa Petrochemical Corp. said Saturday that it will lower its domestic gasoline and diesel prices next week in reflection of a drop in international crude oil prices.

Concerns over a global supply glut came back to haunt market sentiment, sending international crude oil prices lower, which led the privately owned fuel supplier to cut its gasoline and diesel prices by NT$0.3 (US$0.0099) per liter, effective 1 a.m. Monday.

After the cut, prices at Formosa Petrochemical gas stations islandwide will fall to NT$20.9 per liter for super diesel, NT$23.6 per liter for 92 octane unleaded, NT$25.0 per liter for 95 unleaded and NT$27.1 per liter for 98 unleaded, Formosa Petrochemical said.

Crude oil prices dropped this week in the international oil market, with West Texas Intermediate futures falling 0.6 percent in New York.

The decline came amid worry over oversupply after U.S. shale oil production increased and oil demand from China fell, Formosa Petrochemical said.

According to the U.S. Energy Information Administration, crude oil production rose by 79,000 barrels last week to 9.502 million barrels a day, after inventories in the U.S. market fell 8.9 million barrels last week.

China, one of the largest oil consuming countries in the world, reported a drop in oil imports in July to a seven-month-low, which caused more jitters among energy traders and further dampened market sentiment.

In addition, lingering worry over compliance with a production cut decision by members of the Organization of Petroleum Exporting Countries (OPEC) and non-OPEC producers also contributed to wariness in the global oil market, Formosa Petrochemical said.

OPEC and non-OPEC producers have agreed to lower production by 1.8 million barrels a day during the period January 2017 to March 2018.

With the fall in crude prices, Formosa Petrochemical's main competitor, state-owned CPC Corp., Taiwan, is expected to announce a similar price hike at noon on Sunday, to take effect 12 hours later.

CPC calculated the average price of crude oil at US$49.72 per barrel this week, down from NT$51.19 per barrel a week earlier, according to its website.

The state-owned company tallies its weekly fuel prices based on a weighted oil price formula made up of 70 percent Dubai crude and 30 percent Brent crude.

(By Jackson Chang and Frances Huang)