Slight slippage due to stalled debt ceiling negotiations.

World oil prices

According to Reuters , oil prices fell slightly at the close of the week's final trading session as investors worried that US politicians would not agree on a new debt ceiling, potentially leading to a default that would harm the economy and reduce fuel demand.

Brent crude futures for July delivery fell 28 cents, or 0.8%, to $75.58 per barrel. US WTI crude futures for July delivery fell 25 cents, or 0.3%, to $71.69 per barrel.

Despite falling at the end of the week, both Brent and WTI crude oil recorded their first weekly gains after four consecutive weeks of declines. This week, both benchmark oil commodities rose by approximately 2%.

Oil prices relinquished gains of up to $1 after Republican leaders in the House and the administration of President Joe Biden paused negotiations on raising the $31.4 trillion debt ceiling on May 19. The Treasury Department warned that the U.S. government might not be able to pay all its bills by June 1.

Although negotiations on the debt ceiling have stalled, a White House official said an agreement could still be reached.

In addition to the debt ceiling agreement mentioned above, the market was also strongly impacted by comments from Federal Reserve Chairman Jerome Powell that inflation is "far exceeding" the Fed's target, and that no decision has yet been made regarding the next interest rate action.

"The chances of a 25 basis point increase at the June meeting (of the Fed) are increasing every day... There aren't many opportunities for bulls," said Robert Yawger, an analyst at Mizuho.

Following reports of a halt in debt ceiling negotiations and comments from Powell, US stocks, Treasury yields, and the dollar all fell.

Providing some support to the market was U.S. Treasury Secretary Janet Yellen's reaffirmation of the strength and soundness of the country's banking system during a meeting with banking leaders on May 18.

Energy services firm Baker Hughes Co (BKR.O) reported that the number of U.S. oil rigs, an indicator of future production, fell by 11 rigs to 575 this week, the largest weekly decline since September 2021.

Meanwhile, analysts from National Australia Bank said that while the possibility of further interest rate hikes increases concerns about weak demand in the US, oil prices could rise due to higher Chinese demand throughout 2023.

China's oil refining output in April rose 18.9% year-on-year. Chinese refineries are operating at high levels to meet recovering domestic fuel demand and build up inventories ahead of the summer travel season.

Domestic fuel prices

The retail prices of gasoline and diesel in Vietnam on May 20th are as follows:

E5 RON 92 gasoline should not exceed 20,131 VND/liter.

RON 95 gasoline should not exceed 21,000 VND/liter.

Diesel fuel prices should not exceed 17,653 VND/liter.

Kerosene should not exceed 17,972 VND/liter.

Fuel oil price should not exceed 14,862 VND/kg.

Normally, domestic gasoline and diesel prices would be adjusted on May 21st by the inter-ministerial committee of the Ministry of Finance and the Ministry of Industry and Trade. However, this price adjustment period falls on a holiday, so the adjustment will be postponed to the beginning of next week, May 23rd.

This week, fuel prices accelerated their rise after four weeks of sharp declines. A slight increase of 300-500 VND/liter (or kg) is expected.

MAI HUONG

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