MANILA – Domestic oil prices are expected to increase next week by as much as PHP1 per liter due to global supply concerns, Jetti Petroleum president Leo Bellas said.

In an advisory, Bellas said diesel prices may rise between PHP0.80 to PHP1 per liter, while gasoline could go up by PHP0.30 to PHP0.50 per liter, citing developments in the foreign exchange market and the Asian benchmark as of Thursday.

“Diesel price has found support from weather-related supply and demand issues, as well as the continued geopolitical tension in the Middle East that directly affects supply dynamics, at a time when Europe is moving away from Russian-origin supplies,” he said.

Bellas also noted that limited diesel exports from China, due to higher domestic demand during the Lunar New Year festivities, have provided near-term price support.

On the other hand, he said weak fundamentals have kept gasoline prices relatively softer.

“The possible domestic price increase of gasoline can be attributed to the effects of higher premium due to geopolitical tensions,” Bellas added.

He said fast-rising crude prices, driven by the potential for a US attack on Iran and lower expected outflows from China during the Lunar New Year, have put a floor on prices.

Oil prices have fluctuated this week amid hopes for de-escalation of US-Iran tensions and fears of disrupted flows in the Strait of Hormuz, through which about 20 percent of OPEC exports pass, Bellas noted.

“Other bullish factors include the decision by OPEC+ to keep March production output unchanged, the US-India trade deal in exchange for India, that should act as a near-term catalyst supporting oil prices, and the large draw in US crude and diesel/middle distillate inventories,” he said.

Oil prices have been on the rise for at least the past five weeks.