Slight slide due to pending debt ceiling negotiations

World oil prices

According to Reuters , at the end of the last trading session of the week, oil prices fell slightly due to investors' concerns that US politicians would not agree on a new debt ceiling and cause a default, which would harm the economy and reduce fuel demand.

Brent crude for July delivery fell 28 cents, or 0.8%, to $75.58 a barrel. U.S. West Texas Intermediate crude for July delivery fell 25 cents, or 0.3%, to $71.69 a barrel.

Despite the weekly decline, both Brent and WTI posted their first weekly gains after four straight weeks of declines. Both benchmarks have gained about 2% this week.

Oil prices gave up as much as $1 after Republican leaders in the House of Representatives and President Joe Biden’s administration on May 19 suspended talks on raising the $31.4 trillion debt ceiling. The Treasury Department has warned the U.S. government may not be able to pay all its bills by June 1.

Although the debt ceiling deal is stalled, a White House official said a deal is still possible.

In addition to the debt ceiling deal, markets were also hit hard by Federal Reserve Chairman Jerome Powell's comments that inflation was "far above" the Fed's target, adding that no decision had been made on further interest rate action.

“The chances of a 25 basis point hike at the (Fed’s) June meeting are increasing by the day… There’s not much room for bulls,” said Mizuho analyst Robert Yawger.

Following reports of a pause in debt ceiling talks and Powell's comments, US stocks, Treasury yields and the US dollar all fell.

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

The number of U.S. oil rigs, an indicator of future output, fell by 11 to 575 this week, the biggest weekly decline since September 2021, energy services firm Baker Hughes Co (BKR.O) said.

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

China’s oil refining output rose 18.9% in April from a year earlier, as refineries maintained high levels of operations to meet recovering domestic fuel demand and build up inventories ahead of the summer travel season.

Domestic gasoline prices

Domestic retail prices of gasoline on May 20 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.

Normally, on May 21, domestic gasoline prices will be adjusted by the Ministry of Finance and the Ministry of Industry and Trade. However, this price adjustment period falls on a holiday, so the gasoline price adjustment will be moved to the beginning of next week, May 23.

This week, gasoline prices accelerated after four weeks of “unstoppable decline”. It is expected that gasoline prices will be adjusted up slightly by about 300-500 VND/liter (kg).

MAI HUONG

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