Crude oil prices seen to go higher

The prices of petroleum products in the world market will continue to go up although not as large as the more than 100-percent rise experienced last year.

This is the forecast of Jorge Montepeque, editorial director of Platts, an oil and petroleum publication of Standard & Poor's (S&P), a highly-respected global credit rating agency.

Montepeque said the price of crude oil will move in the $24 to $25 per barrel range. Dubai oil hit $25.70 on Feb. 15 while the West Texas Intermediate (WTI) peaked at $30.30 the day before.

Since then, Dubai prices have leveled at $24.70 to $24.95 while the WTI slipped back to a manageable $29.50 to $30 per barrel.

As a rule of thumb, the prices of local petroleum products rise by an average P0.27 per liter for every dollar per barrel increase in crude prices.

The Organization of Petroleum Exporting Countries (OPEC) has been often labeled as a "villain," and the production cutback which has been pushing the prices of crude oil has not been improving that image.

The Platts editorial director said the OPEC wants to cleanse its image without losing the economic gains as a result of the production cutback.

"They also realize that they cannot price themselves out of the market. Sooner or later, the market will seek other sources of energy resulting in an over-production and ultimately a sudden drop in prices. That of course, is detrimental to OPEC in the long run and they know it," he wrote.

In the face of these conditions. Montepeque advises poor countries like the Philippines to reduce consumption of oil products.

"But let the price alone force the market to conserve rather than use a paternal solution," he said, referring to the head of state.

The Philippines has been gradually reducing its dependence on fossil fuel through the development and exploitation of alternative sources of energy for power plants like coal, geothermal, and hydropower.

Its dependence on imported petroleum products has dropped by 50 percent since 1998, according to the Department of Energy (DOE).