As the coronavirus pandemic spreads across the world, oil prices face another week of decline, hitting a new low of US$20 per barrel.
Thai energy experts believe the price is likely to fall below $20 over the next few months from $32 per barrel in early March if the situation continues through the end of the second quarter.
Gasohol is also down 6.5 baht per litre to 17.98 baht, from 24.48 baht on March 3. While biodiesel B10 is down by 4.15 baht per litre to 17.24 baht per litre.
Thailand's largest capacity oil refiner Thai Oil (TOP) recently reported oil prices have declined for five consecutive weeks to almost $20 per barrel, the lowest level in 18 years, because of the outbreak.
The report said the world's largest oil trader, Trafigura, estimates oil demand is down 33% or over 30 million barrels per day.
TOP reported Saudi Arabia announced it will increase export volumes by 600,000 barrels per day (BPD) to 10.6 million from May after an agreement on oil production volume with the US and Russia was completed.
Oil analyst Manoon Siriwan said the price is likely to drop below $20 per barrel soon thanks to very low demand in the global market.
"In the past global oil prices dropped from negative impacts in some areas, but this pandemic spread across the world in two months and there are no signs of recovery," he said.
Many metropolitan cities around the world are locked down, while land and airplane transport have virtually collapsed.
He said oil dropping below $20 is similar to the impact during the 2008 subprime mortgage crisis that drove the US and EU into an economic meltdown.
"The global economic recession caused by the virus will be much worse than the subprime crisis," Mr Manoon said.
For domestic retail prices, he said the situation will be worse than the big flood of 2011, which cut down land traffic in central Thailand.
Praiphol Koonsap, another oil analyst and economist from Thammasat University, said prices are likely to fall below $20 per barrel for a while and then stay in a range of $20-30 for a few months.
This price range will cause oil firms to cut crude oil production in the North Sea in Europe and of shale gas in North America. Only oil production in Russia and the Middle East can profit from that price range because of low production costs.
SET-listed Susco is expected to revise investment plans if the situation worsens and continues to the end of the second quarter, said managing director Chairit Simaroj.
He said the company estimated a decline in retail oil sales because more people are working from home.
Mr Chairit said the company will maintain 2,000 workers to operate 600 stations nationwide.
Normally each month the sales volume of Susco would be 2-3 million litres per day. He said global oil prices will stay below $30 per barrel for the next few months until several oil production fields cannot make a return on their investment.
The situation may deteriorate for producers if the government declares a curfew, which would affect oil operations.
"We may open pumps for a shorter amount of time, but not totally shut down operations for a full day," Mr Chairit said.
National oil and gas conglomerate PTT estimates the global average for oil prices this year may range between $40-50 per barrel from $50-60 last year due to the pandemic.
Auttapol Rerkpiboon, chief operating officer of the downstream petroleum business group for PTT, said Saudi Arabia shocked the global market by slashing export prices to punish Russia for not reducing oil production as a measure to help an industry staggering from the pandemic. The move drove crude oil prices below $30 a barrel in much of the world, leaving domestic oil producers in Thailand scrambling to respond.
He said Russia is expected to hold talks with Saudi Arabia in June, by which time the significant oil price slump may be resolved.
Despite the global economic decline, PTT will not suspend capital expenditures over the next five years, said Mr Auttapol.