World oil prices

Oil prices extended their decline into the trading session on May 31, pressured by a stronger US dollar and weak data from top oil importer China that raised concerns about demand, Reuters reported.

Gasoline prices continue to fall, affected by many factors. Illustration photo: Reuters

Brent crude for August delivery fell $1.11 to $72.60 a barrel. U.S. West Texas Intermediate (WTI) crude fell $1.37, or 2 percent, to $68.09 a barrel.

Both benchmarks fell more than $2 at one point during the session to multi-week lows, after Brent and WTI both fell nearly 5% in the previous session.

Oil prices fell after Chinese data showed manufacturing activity contracted faster than expected in May due to weak demand. The official manufacturing purchasing managers' index (PMI) fell to a record low of 48.8 from 49.2 in April, missing forecasts for a rise to 49.4. Slowing service sector activity pushed the official non-manufacturing PMI down to 54.5 from 56.4. The weak PMI is evidence that the East Asian nation's economic recovery is losing momentum.

Analysts are now lowering their expectations for the Chinese economy, with both Nomura and Barclays cutting their forecasts for China's 2023 GDP growth.

Meanwhile, the US dollar strengthened, supported by cooling inflation in Europe and progress on a bill to raise the US debt ceiling.

Reuters also added that US data showed that job openings unexpectedly increased in April. Specifically, job openings, a measure of labor demand, increased by 358,000 to 10.1 million on the last day of April, showing the strength of the labor market. This could prompt the US Federal Reserve (Fed) to raise interest rates in June. The Fed's "Beige Book" report on May 31 described the labor market as "continued to be strong" in May.

Weaker-than-expected Chinese economic data, the debt ceiling hike, two years of flat spending and the possibility of another Fed rate hike next month are weighing on the market, said Bob Yawger, director of energy futures at Mizuho.

Traders will be watching the upcoming OPEC+ meeting on June 4. Mixed signals from major oil producers on further production cuts have caused volatility in oil prices, but HSBC and Goldman Sachs banks as well as analysts do not expect OPEC+ to announce further cuts at the meeting.

Stronger oil demand from China and the West from the summer onwards will cause a supply deficit in the second half of the year, HSBC said.

“The most likely course of action is no action,” said Stephen Brennock, oil market analyst at PVM, of the OPEC+ decision.

Gasoline prices continue to fluctuate. Illustration photo: Reuters

In the US, crude oil production at the mine increased in March to 12.696 million barrels/day, the highest since March 2020.

Data from the American Petroleum Institute (API) showed that US crude oil inventories rose by 5.202 million barrels last week, compared with analysts' expectations for a decrease of 1.22 million barrels. US gasoline inventories also rose by 1.891 million barrels.

Rising US oil and gas reserves have pushed oil prices down further.

Domestic gasoline prices

Domestic retail prices of gasoline on June 1 are as follows:

Last week, world oil prices marked the second consecutive week of increase. Therefore, it is likely that domestic oil prices will be adjusted up at the price adjustment session of the Ministry of Finance - Ministry of Industry and Trade on June 1 with an expected increase of about 400 - 900 VND/liter (kg). However, over the past two days, world oil prices have dropped by more than 6%, so domestic oil prices may only increase slightly, or even decrease.

Since the beginning of the year, gasoline prices have undergone 14 adjustments, including 8 increases, 5 decreases, and 1 unchanged.

MAI HUONG