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| Oil prices today, June 7, concerns about slow global economic growth and rising US gasoline reserves have pushed oil prices down. (Source: Reuters) |
Oil prices fell less than 1% on Friday on concerns that slowing global economic growth could dent energy demand, Reuters reported, overshadowing Saudi Arabia’s pledge last weekend to deepen production cuts.
Brent crude futures fell 42 cents, or 0.6%, to $76.29 a barrel, while U.S. West Texas Intermediate (WTI) crude futures fell 41 cents, or 0.6%, to $71.74 a barrel.
Supporting the decline in oil prices was news that U.S. gasoline and distillate inventories rose last week. Gasoline inventories rose by 2.417 million barrels after rising by 1.891 million barrels the previous week, according to the American Petroleum Institute (API); distillate inventories rose by 4.5 million barrels but remained significantly below the five-year average for this time of year.
Also according to API, inventories at Cushing, Oklahoma, increased by 1.535 million barrels. However, US oil inventories decreased by 1.710 million barrels, contrary to analysts' forecast of an increase of 1.5 million barrels.
Oil prices jumped in the first half of the trading session on June 5 as the market received information that OPEC+ decided to extend the oil production cut policy until the end of 2024 and that Saudi Arabia would cut production to about 9 million barrels/day in July from about 10 million barrels/day in May. Saudi Arabia, the world's leading oil exporter, also unexpectedly increased the selling price of Arab Light crude to Asian buyers.
However, Saudi Arabia's supply cuts are unlikely to push oil prices to a "sustainable price rally" in the $80-$90/bbl range due to weak demand, stronger non-OPEC supply, slower economic growth in China and potential recessions in the US and Europe, Citi analysts said in a note.
The US dollar rose as investors awaited fresh signals on whether the US Federal Reserve (Fed) will raise or keep interest rates unchanged this June, also pushing oil prices down.
“Crude oil prices fell as global growth concerns continued to point to a much weaker outlook for crude oil demand,” said Edward Moya, senior market analyst at data and analytics firm OANDA.
Still, the World Bank raised its global growth outlook for 2023 as the U.S., China and other major economies proved more resilient than expected. It also said higher interest rates and tighter credit would weigh more heavily on next year’s results because higher rates raise borrowing costs, potentially slowing the economy and reducing oil demand.
Domestic retail prices of gasoline on June 7 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 17,943 VND/liter.
Kerosene not more than 17,771 VND/liter.
Fuel oil not exceeding 14,883 VND/kg.
The above domestic gasoline prices were adjusted by the Ministry of Finance - Industry and Trade in the price management session on June 1.
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