World oil prices

Continuing the slight decline of the first trading session of the week, oil prices ended the trading session on June 20 due to concerns about uncertain demand from China - the world's second largest oil consumer.

Gasoline prices have fallen for two consecutive sessions since the beginning of the trading week. Illustration photo: Oilprice

According to Oilprice , Brent crude fell 19 cents, or 0.25%, to $75.9 a barrel, while US WTI crude plunged $1.28, or 1.78%, to $70.5 a barrel.

While China’s decision to cut its one- and five-year lending rates will help boost economic activity, the country’s oil demand is increasingly uncertain, Oilprice said. China cut its lending rate for the first time in 10 months, a smaller-than-expected 10 basis point cut, Reuters reported.

“Oil traders may need to see a strong economic recovery materialise in China to improve their outlook for oil demand,” said Tina Teng at CMC Markets in Auckland.

China's massive stockpiling in recent weeks and the recent downgrade of the country's oil demand growth for 2023 by the China National Petroleum Corporation (CNPC) have thrown cold water on immediate expectations of strong demand in the East Asian nation.

Last month, Chinese refiners added about 1.77 million barrels per day of crude to their inventories, the highest level since July 2020. The stockpiling came during the peak of refinery spring maintenance, bringing the total amount of crude in China’s storage to nearly 1 billion barrels.

During the trading session on June 20, there was a time when WTI oil price slipped below the 70 USD/barrel mark and Brent oil was traded below 75 USD/barrel.

Crude oil prices fell in part as U.S. gasoline and diesel futures fell nearly 3%.

Edward Moya, senior market analyst at data and analytics firm OANDA, commented on the volatility of oil prices over the past two days that oil prices are being heavily influenced by everything related to China.

OPEC+'s production quota cuts also have a strong impact on gasoline prices. Illustration photo: Reuters

Demand concerns extend beyond China. The European Union (EU) has seen two consecutive quarters of recession due to slowing inflation and consumer spending. Economic output in the EU contracted in the first quarter of 2023, raising concerns that a global recession could dent oil demand.

Another bearish factor is the OPEC+ production cut. While this may theoretically appear to limit crude supply, the move is a testament to the outlook for global crude demand, primarily from China.

Expectations that oil demand will increase in China and India in the second half of this year have limited the decline in oil prices.

Domestic gasoline prices

Domestic retail prices of gasoline on June 21 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. Although world oil prices have plummeted over the past two days due to uncertainty in demand from China, experts, key enterprises, and domestic retailers still 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), except for fuel oil prices, which will decrease slightly. The adjustment level will depend on the allocation of the Oil Price Stabilization Fund and other adjusted fees, if any.

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