Gasoline price today (August 23): Continues to decrease, leaving the 80 USD/barrel mark

Oil prices continued to decline due to concerns about weak demand from China. WTI crude oil prices slipped below $80/barrel, while Brent crude oil prices “anchored” at $84.03/barrel.

World oil prices

According to Reuters, at the end of the trading session on August 22, oil prices decreased slightly as investors continued to focus on China's incomplete economic recovery, which will affect demand from the world's leading crude oil importer.

Gasoline prices are extending last week's decline. Illustration photo: Reuters

Brent crude futures fell 43 cents, or 0.51%, to $84.03 a barrel, while the October contract for U.S. West Texas Intermediate (WTI) crude futures fell 48 cents to $79.64 a barrel. The September contract for WTI futures fell 37 cents, or 0.46%, to $80.35 a barrel in limited volume ahead of the upcoming expiration.

China, the world’s second-largest economy, will be crucial in protecting oil demand for the rest of the year. Its economic performance has disappointed markets in recent months as promised stimulus fell short of expectations, including a smaller-than-expected cut in the benchmark lending rate by the People’s Bank of China.

The People's Bank of China cut its one-year loan prime rate by 10 basis points to 3.45 percent from 3.55 percent, lower than the 15 basis points expected by most economists in a Reuters poll. This is the second time China has cut this rate in three months. For the five-year loan prime rate, the bank kept it at 4.2 percent, while economists expected a 15 basis point cut due to default risks from rising liquidity problems in the real estate sector.

Commenting on the drop in oil prices, Jim Ritterbusch, president of Ritterbusch and Associates LLC in Galena, Illinois, said “production cuts by Saudi Arabia and Russia have largely been negated by weak demand for crude from China.”

Adding to demand concerns, US central bank officials have not ruled out further interest rate hikes to curb inflation.

Meanwhile, market sources cited data from the American Petroleum Institute (API) on August 22 showing that US crude oil reserves continued to fall by 2.418 million barrels in the week ending August 18, lower than the previous week's decline of 6 million barrels. The decline in US oil reserves could be a factor supporting oil prices to regain momentum.

In another development, Iraq's state news agency reported that the oil ministers of Iraq and Türkiye discussed the importance of resuming oil flows after pipeline maintenance is completed, a development that could boost global supplies.

Oil prices are likely to regain momentum, supported by continued declines in US oil reserves. Illustration photo: Reuters

Türkiye has halted exports of 450,000 barrels per day - about 0.5% of global supply - via the northern Iraq-Türkiye pipeline since March.

“Such a resumption of exports could add nearly half a million barrels per day to global oil supplies, making a significant step forward in Saudi Arabia’s additional production cuts that are expected to last until next month,” Ritterbusch said.