World oil prices
Brent and WTI oil prices in the US returned to a confrontational position early on the morning of May 12 (Vietnam time) after both falling about 2% to a one-week low in the previous trading session.
The slide in oil prices, according to Reuters , was affected by the political deadlock over the US debt ceiling, raising concerns about the risk of an economic recession in the world's largest oil consumer, while the number of unemployment claims in the country increased, along with weak economic data in China.
Brent crude for July delivery fell $1.43, or 1.9%, to $74.98 a barrel, while U.S. West Texas Intermediate (WTI) crude fell $1.69, or 2.3%, to $70.87 a barrel. This was the lowest closing level for both oil benchmarks since May 4.
The dollar data reinforced the possibility of the US Federal Reserve pausing interest rate hikes but did not boost expectations of a rate cut later in the year, Reuters reported. Higher interest rates can hurt oil demand by raising borrowing costs, putting pressure on economic growth.
US Treasury Secretary Janet Yellen on May 11 called on Congress to raise the $31.4 trillion debt ceiling and prevent an unprecedented default that could trigger a global recession.
"Uncertainties surrounding the US debt ceiling, recent banking issues that could lead to a credit crunch for much of the oil industry, and the possibility of a further, sharp downturn remain significant headwinds" for the oil market, analysts at energy consultancy Ritterbusch and Associates said in a note.
Keeping pressure on oil prices was a decline in the US Dow and S&P 500 (.DJI) , (.SPX) stock indexes after shares of California-based PacWest Bancorp plunged, sparking another downturn in the banking sector.
Minneapolis Fed President Neel Kashkari said an extended period of higher interest rates could put more stress on banks but would be necessary if inflation remained high.
The US producer price index (PPI) rose slightly in April, 0.2% - the smallest annual increase in producer inflation in more than two years, according to the US Labor Department. Data for March was revised up to show the PPI falling 0.4% instead of the previously reported 0.5%. Compared to the same month last year, the PPI rose 2.3% - the smallest annual increase since January 2021 and lower than the 2.7% increase in March.
The Fed has raised its benchmark overnight interest rate by 500 basis points to a range of 5.00%-5.25% since March 2022 to curb inflation. Last week, the Fed signaled a possible pause in its fastest monetary policy tightening campaign since the 1980s.
In another development, the administration of US President Joe Biden has unveiled a sweeping plan to cut greenhouse gas emissions from the energy sector, one of the biggest steps yet in an effort to decarbonize the economy to combat climate change.
Meanwhile, weak data from China, with new bank loans falling more than expected in April, added to concerns that the pandemic recovery in East Asia's top economy is losing momentum.
The oil market shrugged off OPEC's global oil demand forecast for 2023, which continued to forecast demand in China, the world's largest oil importer, to rise by 800,000 barrels per day, up from last month's forecast of 760,000 barrels per day.
However, OPEC said the increase in Chinese demand could be offset by economic risks elsewhere, including the US debt ceiling battle.
Domestic gasoline prices
Domestic retail prices of gasoline on May 12 are as follows:
E5 RON 92 gasoline is not more than 20,131 VND/liter. RON 95 gasoline is not more than 21,000 VND/liter. Diesel oil not more than 17,653 VND/liter. Kerosene not more than 17,972 VND/liter. Fuel oil not exceeding 14,862 VND/kg. |
The Ministry of Finance and the Ministry of Industry and Trade adjusted the domestic gasoline prices mentioned above in the price management session on the afternoon of May 11. Accordingly, gasoline prices dropped sharply by 1,320 VND/liter, and oil prices dropped by 556-647 VND/liter (kg).
In this operating period, the operator has set aside the Price Stabilization Fund for E5 RON 92 gasoline at VND 300/liter (previous period VND 500/liter), RON 95 gasoline at VND 300/liter (previous period VND 500/liter); diesel oil at VND 300/liter (same as previous period); kerosene at VND 300/liter (same as previous period); mazut oil at VND 300/kg (same as previous period) and has not spent the Price Stabilization Fund for all gasoline and oil products.
This is the third consecutive price reduction for gasoline. Since the beginning of the year, gasoline prices have undergone 13 adjustments, including 7 increases, 5 decreases, and 1 unchanged.
MAI HUONG
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