"Holding breath" waiting for US results in the Middle East

Oil prices today, October 18. At the end of the trading session on October 17, oil prices increased slightly as investors waited to see whether US diplomatic efforts and President Joe Biden's trip to Israel would prevent the conflict in the Middle East from expanding.

Oil prices rose slightly today, October 18, as investors waited to see whether US efforts in the Middle East would yield results. (Source: Reuters)

Brent crude futures rose 25 cents, or 0.28 percent, to $89.90 a barrel. U.S. West Texas Intermediate (WTI) crude futures were flat at $86.66 a barrel.

Earlier in the session, oil prices fell as Richmond Federal Reserve Bank President Thomas Barkin said high long-term US borrowing costs were weighing on demand but it was unclear whether that would have an impact on the US central bank’s interest rate decision in three weeks.

Raising interest rates to curb inflation could slow economic growth and reduce demand for oil.

Both oil benchmarks rallied sharply last week on concerns that the Israel-Hamas conflict could spread to the oil-producing region. Global benchmark Brent crude rose 7.5%, its biggest weekly gain since March, and WTI rose nearly 6%.

Reuters reported that President Biden's visit to Israel today is aimed at finding a balance between showing US support for Israel in the Israel-Hamas conflict, while trying to rally Arab countries to prevent conflict in the region.

“Oil prices are wavering as energy traders wait to see if US diplomatic efforts will succeed in preventing the Israel-Hamas conflict from turning into a broader regional war,” said Edward Moya, senior market analyst at OANDA.

Also according to Reuters, thanks to some price support, US retail sales increased more than expected in September as households increased car purchases and spent more at restaurants and bars.

The Venezuelan government and the opposition are also trying to resume negotiations, which could lead to Washington easing sanctions on Venezuela and more oil coming onto the market. However, analysts say a lack of investment in infrastructure is a major obstacle to Venezuela's efforts to increase oil production to meet market demand.

Also on the supply front, Saudi Aramco CEO Amin Nasser said the world’s largest oil company could ramp up production within weeks if needed. According to the CEO, global oil demand is expected to rise to 103 million barrels per day in the second half of this year while the company has 3 million barrels per day of spare capacity.

“The market is very tight right now,” said Phil Flynn, an analyst at Price Futures Group, which is why analysts are worried because even if OPEC increases production, the maximum they can increase production is 3 million barrels per day.

OPEC+ has been cutting production since last year to maintain stability in the oil market.

Regarding US supply, on October 17, data from the American Petroleum Institute showed that US crude oil inventories fell by about 4.4 million barrels in the week ending October 13.

In the domestic market, the selling prices of gasoline and oil today are applied according to the prices at the management session on the afternoon of October 11 of the Ministry of Finance - Industry and Trade.

E5RON92 gasoline: Not higher than VND 21,907/liter, down VND 1,595/liter.

RON95-III gasoline: Not higher than VND 23,044/liter, down VND 1,798/liter.

Diesel 0.05S: Not higher than VND 22,410/liter, down VND 1,184/liter.

Kerosene: Not higher than VND 22,464/liter, down VND 1,352/liter.

Mazut oil 180CST 3.5S: Not higher than 16,238 VND/kg, down 1,214 VND/kg.

According to the Ministry of Industry and Trade, the world oil market in this adjustment period is affected by factors such as: traders' cautious psychology in the face of the possibility of supply disruption due to ongoing tensions in the Middle East; reduced expectations for Saudi Arabia's voluntary production restriction measures...

The above factors caused gasoline prices from October 2-10 to fluctuate up and down, but the general trend is downward.

Given the above developments in world oil prices and current regulations, the Ministry of Industry and Trade and the Ministry of Finance have decided not to set aside or use the Price Stabilization Fund for all oil products.

This is the second consecutive reduction in gasoline prices in October. Compared to the end of September, gasoline prices have decreased by more than VND2,700/liter.

Source: https://baoquocte.vn/gia-xang-dau-hom-nay-1810-nin-tho-cho-ket-qua-cua-my-o-trung-dong-246512.html