Down week for oil prices

Last week, oil prices were the focus of the commodity market as they continuously plummeted. *Photo: MXV*

On September 2, investment cash flow continued to flow strongly into the world raw material market. The energy group led the increase with overwhelming buying power.

According to the Vietnam Commodity Exchange (MXV), two crude oil products reached their highest prices since the beginning of August. Specifically, Brent oil price increased by about 1.45%, stopping at 69.14 USD/barrel, while WTI oil price continued to climb to 65.59 USD/barrel, corresponding to an increase of up to 2.47%.

According to MXV, energy prices have skyrocketed due to the risk of increasing global geopolitical tensions. Along with that, the moves of OPEC+ (Organization of the Petroleum Exporting Countries and its allies) have also become the focus of investors' attention. The market is abuzz with speculation that at the meeting scheduled to take place on September 7, OPEC+ will maintain the current production level, instead of continuing to increase as in previous months.

However, on September 3, the energy market became the center of attention when two crude oil products suddenly reversed and decreased by more than 2% due to the risk of OPEC+ increasing production early.

Expectations that OPEC+ would pause production increases after the peak travel season in the US were shaken when sources said the organization could further loosen quotas at its meeting on September 7. This information immediately caused WTI crude oil prices to fall 2.47% to $63.97/barrel and Brent crude oil to fall 2.23% to $67.6/barrel - the lowest level in a week.

The decline in oil prices continued on September 4, as oil prices were pressured by inventory data and concerns about oversupply. According to MXV, Brent and WTI crude oil prices both lost nearly 1%, closing at $66.99/barrel and $63.48/barrel, respectively.

A new surge in production would mean OPEC+ begins unwinding the second phase of its production cuts, which amount to about 1.65 million barrels per day (bpd), or about 1.6% of global oil demand, more than a year earlier than expected. That could loosen the global supply-demand balance. The move is aimed at further reclaiming OPEC+ market share in the face of intensifying competition.

However, according to many sources, OPEC+ is still considering different options and has not made a final decision on the upcoming production increase plan.

In addition, the US economic picture is not supportive of oil prices in the short term as the services and composite PMI indexes both fell in August, with ADP data showing only 54,000 new jobs, nearly half the previous month. Initial jobless claims increased, raising concerns about weakening energy demand.

The biggest pressure came from the unexpected increase in US crude oil inventories, contrary to previous expectations of a decrease. The latest reports from the American Petroleum Institute (API) and the US Energy Information Administration (EIA) showed that commercial inventories increased by more than 2.4 million barrels, as many refineries entered routine maintenance, reducing input demand for crude oil. This signal overshadowed the supportive impact of the decrease in gasoline inventories, indicating that consumption demand is cooling.

Recorded this morning, September 6, oil prices continued to fall sharply, in which Brent oil decreased by 2.22% to 65.5 USD/barrel; while WTI oil lost 2.54%, to 61.87 USD/barrel.

For the week, according to MarketWatch, WTI oil prices fell about 3.2%; Brent crude oil, the global benchmark, lost about 2.6%. With this momentum, domestic gasoline and oil prices are expected to decrease next week.

Source: https://hanoimoi.vn/tuan-di-xuong-cua-gia-dau-715285.html