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Formosa Petrochemical to cut fuel prices next week

2018/02/03 19:54:15

Taipei, Feb. 3 (CNA) Formosa Petrochemical Corp., a private fuel supplier in Taiwan, said Saturday that it will lower its domestic gasoline and diesel prices next week, following an increase in oil production in the United States.

The rise in shale oil production in the U.S. market has renewed worry about a global supply glut and spooked the global oil market this week, the company said, announcing a NT$0.2 (US$0.0068) per liter cut in its gasoline and diesel prices.

Effective 1 a.m. Monday, prices at Formosa Petrochemical gas stations islandwide will drop to NT$24.6 per liter for super diesel, NT$27.0 per liter for 92 octane unleaded, NT$28.4 per liter for 95 unleaded and NT$30.5 per liter for 98 unleaded, Formosa Petrochemical said.

According to the U.S. Energy Information Administration (EIA), U.S. crude oil production in November topped 10 million barrels a day for the first time since 1970, nearing an all-time output record.

The possibility of a continued increase in shale oil output in the U.S. has raised concerns over an oversupply in the global market, giving rise to cautious market sentiment, market analysts said.

In addition, a rise of the U.S. dollar index, which tracks the currencies of Washington's six trading partners, on strong jobs data for January also helped push down crude oil prices, analysts said.

However, the fall was limited by another EIA report that showed a decrease of 6.8 million barrels in crude oil inventories in the U.S. market in the week ending Jan. 26, steeper than the market estimate of a 1.6 million barrel drop, analysts added.

In addition, high compliance by members of the Organization of Petroleum Exporting Countries (OPEC) and non-OPEC producers with a production reduction agreement also reassured energy traders to some extent, analysts said.

Under such circumstances, Formosa Petrochemical's main competitor, state-owned CPC Corp. Taiwan, is likely keep its fuel prices unchanged next week. 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.

Based on the latest fluctuations in international crude oil prices, CPC's average price of crude oil was calculated at US$67.01 per barrel as of Thursday, an increase of US$0.87 from a week earlier, according to its website.

The company usually announces its weekly fuel prices on Sundays and puts them into effect at midnight.

(By Han Ting-ting and Frances Huang)