Manila: Oil prices are expected to increase further next week, partly due to geopolitical developments overseas. This marks a shift for diesel prices, which saw a decline of PHP0.80 per liter this week.

According to Philippines News Agency, Jetti Petroleum president Leo Bellas stated that diesel prices are anticipated to rise by PHP0.20 to PHP0.40 per liter, while gasoline prices could see an increase of PHP0.40 to PHP0.60 per liter. Bellas explained that oil prices in the Asian benchmark, Means of Platts Singapore (MOPS), were initially lower this week due to the potential for a peace deal in the Ukraine conflict, which would ease sanctions on Russia and bring Russian oil back into global markets.

However, the uncertainty surrounding the Ukraine peace talks has driven oil prices upward. This is attributed to growing concerns over tighter Western sanctions on Russia, along with additional US sanctions and tariffs on Russian oil buyers, which could disrupt supply flows. Bellas also highlighted that freight and premium levels have remained high due to ongoing geopolitical risks and concerns.

Furthermore, demand optimism has bolstered sentiments, following a significant drop in US crude inventories and gasoline stocks. This indicates steady to strong demand during the summer travel season.