Weekly gain after four weeks of decline

World oil prices

Oil prices were hit hard this week by changes in negotiations to raise the US debt ceiling by $31.4 trillion and a tightening oil market. After four consecutive weeks of declines, both Brent and WTI crude oil futures posted weekly gains of about 2%, according to Reuters . Brent ended the week at $75.58 a barrel; US WTI crude closed at $71.69 a barrel.

Oil prices started the week up $1, boosted by the prospect of tightening supply in Canada and elsewhere, despite concerns about a recession that continued to weigh on the market. Wildfires in Alberta, Canada, have disrupted production by at least 300,000 barrels per day. In addition, this month is the month OPEC+ members began voluntary production cuts. Peter McNally, an analyst at Third Bridge, said the cuts could have a bigger impact as the summer progresses, as previous efforts to balance the market have been offset by seasonal weakness and releases from the strategic oil reserve.

Data showing industrial output and retail sales growth in China fell short of forecasts in April, suggesting the world's second-largest economy lost momentum early in the second quarter, while weaker-than-expected retail sales growth in the United States pushed oil prices down slightly in the second trading session of the week.

Optimism about the US debt ceiling deal after US President Joe Biden and Republican Congressman Kevin McCarthy stressed their determination to reach an agreement soon to avoid a catastrophic default helped oil prices turn around, rising about 2% in the next trading session.

However, the strengthening of the US dollar, the possibility that the US Federal Reserve will continue its interest rate hike cycle in June and the suspension of debt ceiling negotiations have once again pushed oil prices back into a downward spiral. In the last two trading sessions of the week, oil prices fell more than 1 USD.

The week's mixed gains and losses, with higher gains, helped oil prices experience a weekly gain for the first time in four weeks of declines.

The International Energy Agency (IEA) this week raised its forecast for global oil demand this year by 200,000 barrels per day to a record 102 million barrels per day. The agency said China’s recovery has exceeded expectations, with the East Asian country’s oil demand hitting a record 16 million barrels per day in March.

It is unclear whether oil prices will continue to maintain their weekly gains or return to a “freezing decline” streak. The answer will depend on whether or not the US debt ceiling negotiations resume, US oil reserves, and other economic factors next week.

Domestic retail prices of gasoline on May 21 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 adjustment of gasoline prices will be moved to the beginning of next week, May 22.

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) in tomorrow’s price adjustment session.

MAI HUONG

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