Gasoline prices today (July 17): Continuing the downward trend

Concerns that the Fed will raise interest rates continue to push oil prices further away from the $80/barrel mark. Brent crude oil prices are close to $79/barrel.

World oil prices

Oil prices fell nearly 1% at the start of the week on growing concerns that the US Federal Reserve (Fed) will raise interest rates at its meeting later this month.

At 5:45 a.m. (Vietnam time), Brent crude oil price decreased by 73 cents, equivalent to 0.91%, to 79.14 USD/barrel. At the same time, WTI crude oil price lost 68 cents, equivalent to 0.9%, to 74.74 USD/barrel.

Oil prices slip below $80/barrel. Illustration photo: Reuters

Oil prices extended last Friday’s slide, falling more than $1 as the dollar rallied and oil traders took profits from the previous rally.

Last week, despite falling for 2 sessions (with a decrease of approximately 1 USD), 3 consecutive increases in the middle of the week helped oil prices continue to record a weekly increase, marking a hat-trick of weekly increases.

Oil prices hit a 10-week high last week. Notably, oil prices have spent two sessions above $80 a barrel, as Craig Erlam, senior market analyst at OANDA, commented that “the recent break above the 9-week high could be seen as a bullish move that could give Brent the momentum to break back above $80 a barrel.”

Last week, oil prices were limited by the announcement of production cuts by top oil exporters Saudi Arabia and Russia for August, along with supply disruptions from Libya and Nigeria.

Last week, the US Department of Labor said that the US consumer price index (CPI) rose slightly by 0.2% in June. Compared to the same period last year, the CPI increased by 3% - the lowest annual increase since March 2021. This shows that US inflation is gradually cooling down and the US interest rate hike cycle is finally cooling down. However, the market still expects the Fed to raise interest rates again this month.

Last week, a report from the US Energy Information Administration (EIA) showed that US crude oil reserves increased by 5.9 million barrels in the week to July 7.

Also last week, while the International Energy Agency (IEA) cut its forecast for global oil demand growth by 220,000 barrels per day from last month's forecast, although it still expects oil demand to hit a record high this year at 102.1 million barrels per day, OPEC maintained its optimistic outlook for global oil demand despite the economic slowdown. OPEC raised its growth forecast for 2023 and predicted a slight decline in 2024.

Oil prices started the trading week in the red. Illustration photo: Reuters

Last week, the U.S. oil rig count — an early indicator of future output — inched up by two to 599, the highest since March 2020, according to energy services firm Baker Hughes Co.

In addition, the head of Libya's oil industry said that the country's crude oil production will be restored soon. That means about 850,000 barrels of oil per day will soon be supplied to the market.