MANILA, Philippines – Prices of crude oil in the global market may see a decline this year because of increasing supply, Phoenix Petroleum chief financial officer Joseph Ong said on Thursday.
Ong said the boom in US shale gas production and the role of US as a possible net oil exporter may affect world prices.
“I think the sentiment of most analysts in the medium and long term is that oil will be soft. It will generally be lower because basically of supply, there is an increase in supply,” he told ANC.
Ong noted that there will still be volatility in prices, while adding that “generally, I think year-on-year, you should expect lower fuel prices.”
“The volatility I think is there to stay. Like any traded commodity—like gold, coffee—you will always have volatility, it is something you just have to live it. Since we are on a deregulated industry, the volatility will be experienced on a week-on-week or month-on-month basis but the general trend should show that it will continue to decline,” he said.
Ong also expects Phoenix to perform better this year compared to last year’s flat profit growth.
The oil firm earlier said its consolidated net income grew only 2% to P665 million in 2013 from P651 million in 2012.
“The competitive environment was quite aggressive in 2013 so we were forced to basically match the prices of our competitors to try to maintain and continue growing our market share. We are a small player so we are not a price leader, we simply react to competitive activity in the market,” Ong explained.
He believes, however, that being a small player allows Phoenix to make quick decisions compared to its bigger competitors.
“We’re also more aggressive in the market in the sense that we’re prepared to compete head on with our competitors in terms of pricing, if that’s what it takes,” he said.
Phoenix, which currently has 368 stations nationwide, expects to grow its market share this year from the estimated 7.2% in the first half of 2013
It is targeting 500 stations by the end of 2015.