World oil prices

Oil prices unexpectedly fell slightly at the start of the new trading week. However, both Brent and WTI crude oil are maintaining prices above $70/barrel.

Oil prices plunged, reversing a hat-trick of gains in the last three trading sessions of last week.

Gasoline prices started the week in the red. Illustration photo: Foxbusiness

Last week, oil prices rose four out of five sessions and fell only once. The rise in oil prices was largely driven by a sharp decline in US crude oil reserves. According to the US Energy Information Administration (EIA), US crude oil inventories fell by 9.6 million barrels in the week ending June 23, far exceeding the 1.8 million barrel decline forecast by analysts in a Reuters poll and more than three times the 2.8 million barrel decline in the same period last year. This decline also exceeded the five-year average from 2018 to 2022. This was the second week of decline in US oil reserves.

Oil prices were also weighed down by data from China’s National Bureau of Statistics (NBS) showing that annual profits at Chinese industrial companies extended their double-digit decline in the first five months of the year, falling 18.8%. In May alone, profits fell 12.6%; while the unemployment rate rose to a new high of 20.8%.

Limiting oil prices’ upside is growing concern about further interest rate hikes by major central banks around the world. Higher interest rates would slow economic activity, affecting overall fuel demand.

Last week, Brent and WTI rose more than $1, posting weekly gains. Despite posting gains last week, Brent’s completed contract fell 6% in the second quarter of 2023. Brent has fallen about 15% year-to-date. Notably, this is the fourth consecutive quarter of decline for Brent. WTI has declined for the second consecutive quarter, losing about 6.5% in the second quarter of this year. Despite the quarterly decline, Brent posted its first monthly gain of the year as sharp declines in oil inventories and OPEC+ production cuts outweighed concerns about demand stemming from rising interest rates.

Gasoline prices continue to fluctuate. Illustration photo: Reuters

Starting July 1, Saudi Arabia voluntarily cut production from 10 million barrels per day to 9 million barrels per day.

This week, fluctuations in US oil reserves; the minutes of the previous meeting of the US Federal Reserve (Fed) released by the Federal Open Market Committee (FOMC) will reveal the prospects for the Fed's next interest rate hikes; China's purchasing managers index report and a number of other factors will affect the increase and decrease of oil prices.

Domestic gasoline prices

Domestic retail prices of gasoline on July 3 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 18,174 VND/liter.

Kerosene not more than 17,956 VND/liter.

Fuel oil not exceeding 14,587 VND/kg.

The domestic gasoline prices mentioned above will be adjusted by the Ministry of Finance - Ministry of Industry and Trade in the price adjustment session this afternoon. Referring to the Singapore market, it is shown that domestic gasoline prices may decrease slightly. If the management agency does not affect the price stabilization fund, gasoline prices may decrease by 100 to 300 VND/liter (kg), and it is also possible that gasoline prices will remain the same as in the most recent price adjustment session.

Since the beginning of the year, gasoline prices have undergone 18 adjustments, of which 9 have increased, 6 have decreased, and 3 have remained unchanged.

MAI HUONG