Will oil prices go down?

Oil prices are expected to continue to decline this week under pressure from excess supply, poor consumption and uncertainty about the US economic outlook.

Oil prices are expected to go down. Photo: MXV

At the end of the first trading session of the week on June 30, selling pressure dominated the energy market. In particular, the prices of two crude oil products reversed and decreased due to concerns about oversupply.

specifically, the price of WTI oil decreased by 0.63%, down to 65.11 USD/barrel. Meanwhile, the price of Brent oil contract for August, which expired yesterday, closed the session down about 0.2%, down to 67.61 USD/barrel. Currently, the price of Brent oil contract for September delivery is temporarily at 66.74 USD/barrel, corresponding to a decrease of 0.09%.

OPEC+ is likely to continue increasing production in August, with an expected increase of 411,000 barrels per day, which could bring the total increase in production by the group since the beginning of 2025 to 1.78 million barrels per day, equivalent to more than 1.5% of total global oil demand.

In addition, supply pressure on the market increased when the US Energy Information Administration (EIA) announced on June 30 that US crude oil production in April reached 13.47 million barrels/day, an increase of 20,000 barrels/day compared to the previous month.

However, on Tuesday, July 1, the energy market recorded new fluctuations. In particular, the buying power of two crude oil products developed positively.

At the end of the session, Brent crude oil prices edged up slightly to $67.11 per barrel, an increase of 0.55%. Likewise, WTI crude oil prices also increased by 0.52% to $65.45 per barrel.

Then on Wednesday, July 2, buying power dominated the energy market, pushing WTI oil prices up 3.06%, stopping at 67.45 USD/barrel; Brent oil prices also approached the threshold of 70 USD/barrel, closing the session at 69.11 USD/barrel, up 2.98%.

The increase in oil prices came from many reasons, including the Caixin PMI index of China's manufacturing industry announced by S&P Global, which increased sharply to 50.4 points in June, surpassing the 50-point threshold and showing that manufacturing activities returned to expansion.

The recovery of the world's second-largest economy , which is also the world's second-largest oil consumer, is expected to boost energy demand in the coming time.

In addition, the US economic situation also showed signs of improvement when the JOLTS job opportunity index increased in May, while the manufacturing PMI index announced by S&P Global also recorded an increase in June.

One reason supporting the rise in oil prices comes from positive signals in trade negotiations between the US and Vietnam and concerns about the risk of political tensions escalating again in the Middle East.

created, on July 2, in a post on the social network Truth Social, US President Donald Trump provided some detailed information about the trade agreement with Vietnam.

In another development, concerns about the political situation in the Middle East continued to increase after Iranian President Masoud Pezeshkian signed a new law stipulating that all future inspections of Iran's nuclear energy facilities by the International Atomic Energy Agency (IAEA) must be approved by Iran's Supreme National Security Council.

On the contrary, gasoline and oil inventories in the US continued to increase, raising concerns about gasoline consumption demand in the US as the summer progresses.

Oil prices turned to weaken on trading day July 3. Source: MXV

However, on Thursday (July 3), oil prices turned to weaken despite positive signals from the US economy.

The prices of both major crude oil products decreased slightly by less than 1%. specifically, Brent oil price decreased by 0.45% to 68.8 USD/barrel; while WTI oil price recorded a decrease of 0.67%, stopping at 67 USD/barrel.

Market attention was largely focused on the newly released US employment indicators, which showed mostly positive signs, especially the unemployment rate, which fell in June.

However, many investors are concerned that positive information about the labor market will cause the US Federal Reserve (FED) to continue to be cautious in making the decision to cut interest rates.

This puts the current energy market under pressure from three main factors: concerns about the demand for gasoline and oil in the US in the coming time; the possibility that OPEC+ will increase production sharply in August, increasing the risk of oversupply in the market; and uncertainties related to the US economic outlook after July 9. Therefore, experts predict that oil prices will continue to decline this week.

Source: https://hanoimoi.vn/gia-dau-lieu-co-di-xuong-708181.html