World oil prices

Concerns about China’s sluggish economy overshadowed massive OPEC+ production cuts and a seventh straight decline in the number of active US oil and gas rigs, sending oil prices tumbling in the first trading session of the week.

Gasoline prices are falling again. Illustration photo: Reuters

Brent crude fell 48 cents, or 0.6 percent, to $76.13 a barrel, while U.S. West Texas Intermediate (WTI) crude fell 49 cents, or 0.7 percent, to $71.29 a barrel, Reuters reported. Trading volumes were thin as the U.S. was on holiday.

Oil prices hit the floor, completely reversing the increase of the last two trading sessions of last week and the increase of more than 2% of the previous week.

Several major banks have cut their forecasts for China’s 2023 gross domestic product (GDP) growth after May data last week showed the world’s second-largest economy’s recovery from the Covid-19 pandemic was slowing. Industrial output and retail sales growth in China fell short of forecasts in May, Reuters reported, adding that Beijing needs to do more to boost the recovery from the pandemic.

Japanese bank Nomura has cut its forecast for China's GDP growth this year to 5.1% from 5.5%, following similar moves by UBS, Standard Chartered, Bank of America and JPMorgan. The banks now expect China's GDP in 2023 to be between 5.1% and 5.7%, down from a previous range of 5.5% to 6.3%.

China is expected to cut its benchmark lending rate today after the People's Bank of China cut its medium-term policy lending facility last week, the first rate cut in 10 months, to support the economic recovery.

Jorge Leon, senior vice president at Rystad Energy, commented that the oil market is watching for further signs of whether the global economy is recovering.

“Much will depend on China’s economic performance in the second half of this year and the effectiveness of its recently announced measures, as well as the ability of the US and Europe to avoid recession amid rising interest rates,” Leon wrote in a research note.

Limiting oil's decline was a rise in Chinese refinery output in May to its second-highest level on record and a cut in the number of active oil and natural gas rigs by U.S. energy companies for a seventh straight week.

Oil prices fall after the US dollar rises. Illustration photo: Reuters

Rising Iranian oil exports also weighed on prices. Iran’s crude exports and oil production hit record highs in 2023 despite U.S. sanctions, adding to global supplies as other producers curb output, according to consultants.

“In terms of crude oil sentiment, traders are pretty bearish,” said Daniel Ghali, commodity strategist at TD Bank. “But from a broader perspective, analysts are still looking for quite significant deficits in the coming months.”

Domestic gasoline prices

Domestic retail prices of gasoline on June 20 are as follows:

E5 RON 92 gasoline is not more than 20,878 VND/liter.

RON 95 gasoline is not more than 22,015 VND/liter.

Diesel oil not more than 18,028 VND/liter.

Kerosene not more than 17,823 VND/liter.

Fuel oil not exceeding 14,719 VND/kg.

World oil prices increased last week, so experts, key enterprises, and domestic retailers predict that in the price adjustment session on June 21 of the Ministry of Finance - Industry and Trade, domestic oil prices will be adjusted up by about 100-200 VND/liter (kg). The adjustment level depends on the allocation of the Oil Price Stabilization Fund and other adjusted fees, if any, and the development of world oil prices today.

Since the beginning of the year, gasoline prices have undergone 17 adjustments, including 9 increases, 6 decreases, and 2 unchanged.

In the most recent adjustment (June 12), gasoline prices remained unchanged and oil prices increased slightly.

MAI HUONG