World oil prices weaken after two upbeat sessions

According to the Vietnam Commodity Exchange (MXV), the world raw material market was relatively volatile in yesterday's trading session (June 4). At the close, the MXV-Index was flat, fluctuating around 2,195 points. As soon as it opened, the prices of the two oil products reversed and weakened. In addition, in the industrial raw material market, sugar prices were also under great pressure as global demand showed no clear signs of recovery.

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MXV-Index

World oil prices fell across the board

Closing yesterday's trading session, the energy market was covered in red when all 5 commodities in the group simultaneously turned down. In particular, the oil price increase in the previous two trading sessions was also stopped when data from the US Energy Information Administration (EIA) was released.

Closing, Brent oil price fell below the threshold of 65 USD/barrel when it stopped at 64.86 USD/barrel, down about 1.17%. Similarly, WTI oil price also decreased about 0.88%, down to 62.85 USD/barrel.

Energy price list

According to the weekly petroleum status report just released by the US Energy Information Administration (EIA), commercial crude oil inventories in the work week ending May 30 fell by 4.3 million barrels – similar to the American Petroleum Institute (API) estimate of a decrease of about 3.3 million barrels of oil at the end of June 3. However, according to data from EIA, petroleum inventories increased sharply by more than 5.2 million barrels last week, a sign that fuel consumption in the US is at risk of slowing down.

According to Giovanni Staunovo, an expert at UBS bank, this week's EIA report is a negative signal for the oil market. He commented that the strong demand for crude oil from refineries has caused a sharp decline in commercial crude oil reserves, but after the Memorial Day holiday (May 26), the supply of refined products increased sharply while demand weakened, leading to a spike in gasoline inventories. In particular, distillate fuel inventories also increased sharply last week by 4.23 million barrels.

Concerns about US oil demand continued to grow following the latest assessment of the health of the world's largest economy from the US Federal Reserve (FED). In the Beige Book released yesterday, economic activity in the US has weakened slightly in recent weeks, while the White House's tariff policies have put upward pressure on costs and prices since the last meeting of the Federal Open Market Committee (FOMC). This has made businesses and households more cautious in their consumption decisions, contributing to concerns about domestic fuel demand.

Previously, the Organization for Economic Cooperation and Development (OECD) cut its global economic growth forecast from 3.3% in 2024 to 2.9% in 2025, down from the 3.1% forecast made in March. Global trade tensions, especially between the US and China, are still ongoing and are considered one of the main reasons for this downward adjustment. The gloomy economic situation in the US in particular and the world in general has increased market concerns about the outlook for oil demand in the coming time.

In addition, oil prices were also pressured by supply as some oil production in Canada was restored yesterday after a period of interruption due to wildfires. In addition, the impact of OPEC+ increasing production by 411,000 barrels/day in July continued to put pressure on global oil prices.

Prospects of abundant supplies put pressure on sugar prices

According to MXV, at the end of yesterday's trading session, buying power dominated most key commodities in the industrial raw materials group. However, contrary to the general trend of the group, the prices of two sugar commodities simultaneously weakened. Of which, the price of raw sugar decreased by 0.89% to 369.27 USD/ton, while the price of white sugar also decreased by 1.18%, anchored at 468.1 USD/ton.

Industrial raw material price list

The main reason for the sharp decline in sugar prices is the forecast of a sharp increase in global supply. In India, the world’s second-largest sugar producer, the National Federation of Cooperative Sugar Mills forecasts sugar production to rise 19% year-on-year to 35 million tonnes in 2025-26, driven by expanded cane acreage. Favourable weather conditions with an early southwest monsoon and above-average rainfall in major sugarcane-growing states such as Maharashtra and Karnataka have further supported the prospects of a bumper crop.

In Brazil, sugar exports from the North and Northeast increased in volume. Sugar and energy mills supplied 3.72 million tons to the market, up 7.5% year-on-year. In Central and South Brazil, the ongoing dry weather has not seriously affected the harvest progress, although if the situation persists, the sugar content of the cane may decrease in the coming weeks.

In addition, in the US, sugar beet planting has been completed in major producing states, with completion rates approaching 100%, ahead of the same time last year and above the multi-year average. Crop assessments in Idaho, Michigan, Wyoming, Oregon, and Colorado have shown a majority of good to excellent rates, reinforcing expectations for a bumper crop.

Meanwhile, demand for sugar in major markets such as the US is showing signs of weakening. In the first quarter, total imports of cane sugar, beet sugar and pure sucrose into the US reached just over 648,700 tonnes, down 29.3% compared to the same period last year. This reflects the caution of importers in the face of the global economic situation and health factors related to sugar.

The report “Making America Healthy Again” by the MAHA Commission, chaired by Secretary of Health and Human Services Robert F. Kennedy Jr., also expressed concern about the use of sugar in the diet of the American people, especially children. Sugar is considered one of the main causes contributing to the increase in chronic diseases in children, leading to policies to limit sugar use, negatively affecting consumption demand.

Prices of some other goods