WTI oil price slips below $80/barrel, Brent oil "anchors" at $84.03/barrel

Today's oil and gas prices, August 23, WTI oil price slipped below the 80 USD/barrel mark, Brent oil price "anchored" at 84.03 USD/barrel.

Giá xăng dầu hôm nay 16/7: Tuần thứ ba tăng liên tiếp

Oil prices today, August 23, WTI oil price slipped below the 80 USD/barrel mark, Brent oil price 'anchored' at 84.03 USD/barrel. (Source: Chevron)

According to Reuters , at the end of the trading session on August 22, oil prices decreased slightly as investors continued to focus on China's incomplete economic recovery, which will affect demand from the world's leading crude oil importer.

Brent crude futures fell 43 cents, or 0.51%, to $84.03 a barrel, while the October contract for U.S. West Texas Intermediate (WTI) crude futures fell 48 cents to $79.64 a barrel. The September contract for WTI futures fell 37 cents, or 0.46%, to $80.35 a barrel in limited volume ahead of the upcoming expiration.

China, the world’s second-largest economy, will be crucial in protecting oil demand for the rest of the year. Its economic performance has disappointed markets in recent months as promised stimulus packages have fallen short of expectations, including a lower-than-expected cut in the benchmark lending rate by the People’s Bank of China.

The People's Bank of China cut its benchmark one-year lending rate by 10 basis points to 3.45 percent from 3.55 percent, lower than the 15 basis points expected by most economists in a Reuters poll. This is the second time China has cut this rate in three months.

For the five-year loan prime rate, the bank maintained it at 4.2 percent, while economists expected a 15 basis point cut due to the risk of default from rising liquidity problems in the real estate sector.

Commenting on the drop in oil prices, Jim Ritterbusch, president of Ritterbusch and Associates LLC in Galena, Illinois, said “production cuts by Saudi Arabia and Russia have largely been negated by weak demand for crude from China.”

Adding to demand concerns, US central bank officials have not ruled out further interest rate hikes to curb inflation.

Meanwhile, market sources cited data from the American Petroleum Institute (API) on August 22 showing that US crude oil inventories continued to fall by 2.418 million barrels in the week ending August 18, lower than the previous week's decline of 6 million barrels. The decline in US oil reserves could be a factor supporting oil prices to regain momentum.

In another development, Iraq's state news agency reported that the oil ministers of Iraq and Türkiye discussed the importance of resuming oil flows after pipeline maintenance is completed, a development that could boost global supplies.

Türkiye has halted exports of 450,000 barrels per day - about 0.5% of global supply - via the northern Iraq-Türkiye pipeline since March.

“Such a resumption of exports could add nearly half a million barrels per day to global oil supplies, making a significant step forward in Saudi Arabia’s additional production cuts that are expected to last until next month,” Ritterbusch said.

Domestic retail gasoline prices were adjusted on the afternoon of August 21 as follows:

E5 RON 92 gasoline is not more than 23,339 VND/liter.

RON 95 gasoline is not more than 24,601 VND/liter.

Diesel oil not more than 22,354 VND/liter.

Kerosene not more than 22,309 VND/liter.

Fuel oil not exceeding 17,981 VND/kg.

Domestic gasoline prices on August 21 were adjusted up in the context of world oil prices tending to decrease, causing many people to wonder.

Analyzing the reason why world oil prices have decreased but domestic retail gasoline prices have increased, Mr. Hoang Trung Dung, Director of the Petroleum Additives and Products Development Joint Stock Company, said that domestic gasoline prices are related to world crude oil prices, and then from the price of crude oil through processing, the price of finished gasoline products in the Singapore market will be determined.

Currently, Vietnam's gasoline prices are most closely linked to the gasoline prices of the Singapore market because they are imported directly from there and do not depend entirely on the movements of world crude oil prices. In addition, even if world crude oil prices decrease, domestic retail gasoline prices can still increase because they fluctuate about 30 days later than crude oil prices.

"For example, when crude oil is at its highest at 87 USD/barrel, we buy it and put it in the refinery, the lowest price for the product sold must be 87 USD. But a month later, the price of crude oil may drop to 75 USD/barrel. At that time, we do not reduce it immediately, but only when we sell all the purchased amount at the old price will we reduce the price according to the world market. In short, Vietnam's gasoline prices are largely determined by the price of finished gasoline products on the Singapore market," said Mr. Dung.

Therefore, according to Mr. Dung, the increase in domestic gasoline prices on August 21 is reasonable.

Source