Oil prices are expected to continue to fall in the first days of the new year 2024

World oil prices continue to decline

Last week, the last trading week of 2023, oil prices recorded a weekly decline.

According to Reuters, for the whole year, oil prices have fallen more than 10% and ended the year at their lowest level since 2020. Brent oil ended 2023 at $77.04/barrel, US WTI oil closed at $71.65/barrel.

This leaves both benchmark oil prices well below $80 a barrel.

World oil prices are expected to continue to decrease in early 2024. (Illustration photo).

In the last week of 2023, oil prices fluctuated strongly in each trading session. Last week, oil prices only traded for 4 days due to the Christmas holiday on December 25. Oil prices increased in 1 session and decreased in 3 consecutive sessions.

Oil prices rose in the first session of the week as attacks on ships in the Red Sea raised concerns about shipping disruptions, and expectations that central banks around the world would cut interest rates to boost economic growth and fuel demand.

Despite the Houthis' continued attacks in the Red Sea, many major shipping companies have announced the resumption of commercial operations in the area.

For example, Denmark’s Maersk said it would route most of its container ships between Asia and Europe through the Suez Canal and divert some around Africa. France’s CMA CGM is also gradually increasing the number of ships operating through the Suez Canal.

The decision of shipping companies has become a factor that "pushes" oil prices to "plummet" with 2 sessions of a total decrease of more than 5% and the last trading session of 2023 decreased modestly by more than 10 cents.

World oil prices are forecast to continue to decline in the early days of 2024. Oil prices in 2024 are forecast to average $82.56 per barrel. Results of a recent Reuters survey of 34 economists and analysts showed that Brent crude oil prices fell compared to the forecast of $84.43 per barrel in November.

Many believe that the oil market will continue to see volatility as it moves into 2024, with geopolitical events at play and concerns that conflict could spread across the Middle East.

In the context of many OPEC+ members voluntarily cutting oil production until the end of the first quarter of 2024, OPEC expects oil demand in 2024 to increase by 2.2 million barrels/day to stabilize at 104.4 million barrels/day.

Meanwhile, the International Energy Agency forecasts demand will increase by only 1.1 million barrels per day, half of OPEC's forecast, to 102.8 million barrels per day.

Domestic retail price of gasoline

Domestic retail gasoline prices on the morning of January 1, 2024 will be applied according to the adjustment session from 3:00 p.m. on December 28, 2023 by the Ministry of Finance - Ministry of Industry and Trade.

Specifically, the price of E5 RON92 gasoline decreased by 13 VND/liter, down to 21,186 VND/liter; RON95 gasoline increased by 3 VND/liter, up to 22,148 VND/liter.

The domestic retail price of gasoline on the morning of January 1, 2024 will be applied according to the adjustment session from 3:00 p.m. on December 28, 2023 by the Ministry of Finance - Ministry of Industry and Trade. (Photo: Cong Hieu).

Similarly, diesel price increased by VND264/liter, to VND19,788/liter; on the contrary, kerosene decreased by VND37/liter, to VND20,457/liter and fuel oil increased by VND420/kg, to VND15,685/kg.

According to the Ministry of Industry and Trade - Ministry of Finance, the world oil market in this management period (from December 21, 2023 to December 27, 2023) is affected by factors such as: developments in the Red Sea in the context that some major shipping lines have begun to resume operations through the Red Sea, US crude oil reserves may decrease while distillate and gasoline inventories are likely to increase...

The above factors have caused world oil prices to fluctuate slightly, increasing and decreasing alternately in recent days.

Regarding the Petroleum Price Stabilization Fund (BOG), in this management period, in light of the above-mentioned developments in world petroleum prices and current regulations, the Ministry of Industry and Trade - Ministry of Finance jointly decided to: Set aside the BOG Fund for fuel oil, not set aside the BOG Fund for gasoline, diesel oil and kerosene; not use the BOG Fund for all petroleum products.

Thus, from the beginning of the year to the latest adjustment session on the afternoon of December 28, gasoline prices have undergone 38 adjustments, including 21 increases, 14 decreases, and 3 unchanged.

PHAM DUY

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