At the same time, OPEC also predicts that Russia’s oil production will fall by 900,000 barrels in 2023, significantly higher than the new 500,000-barrel cuts announced by Russia late last week.
According to Mr. Pham Quang Anh, Director of the Vietnam Commodity News Center, the market’s supply-demand balance in 2023 will be in a more balanced state than a year ago. However, in the short term, it will be difficult for any manufacturer to fill the supply gap left by Russia. So this remains a supportive factor for oil prices.
Currently, due to the cooling of world oil prices, domestic gasoline prices have also decreased by nearly 30% compared to the peak set in the second quarter of 2022. After the latest price management period on February 13, the price of E5RON92 gasoline is currently no higher than VND 22,869/liter and the price of RON95-III gasoline does not exceed VND 23,767/liter.
Interest rate pressure cooled down, creating long-term support
The crude oil market is also a major financial investment market in the world, so the monetary policy of central banks, especially the US Federal Reserve (Fed) will have a direct impact on oil prices. .
Both Brent crude and WTI crude are quoted in USD. So when the Fed changes interest rates, not only investors but also companies trading and importing and exporting crude oil will also be greatly affected.
The US consumer price index (CPI) released yesterday, although cooled down, was still higher than forecast. Specifically, CPI increased by 6.4% from a year ago and higher than forecast of 6.2%. Core CPI (excluding energy and food) is still 5.6% higher than the same period last year.
Inflation is still significantly above the Fed’s 2% inflation expectation, which will prompt policymakers to continue to raise interest rates in more waves. The CME’s interest rate tracker shows that the Fed may raise interest rates by 25 basis points in the next three meetings to bring the operating rate to 5-5.25 percent.
This move could cause the dollar to appreciate and put pressure on both business activities and oil investment in the short term. However, now that US inflation is showing clear signs of falling sharply compared to other regions in the world such as the UK or EU, the Fed may soon stop the interest rate hike cycle in the second quarter of this year.
Also according to Mr. Pham Quang Anh, inflation pressure and interest rates may continue to weigh on global economic growth in general, and restrain oil prices in particular. But from the second half of this year, investors can expect a brighter outlook, with a clear recovery coming from fuel-consuming industries such as manufacturing and tourism.