As of 9:00 AM this morning (April 21, Vietnam time), Brent crude prices dropped further to $80.98/barrel, while West Texas Intermediate (WTI) light sweet crude traded around $77.29/barrel. At the close of yesterday's session, crude prices dropped by up to 2.4%, touching their lowest levels in two weeks.
Crude oil is facing substantial downward pressure as market fears grow regarding a US recession, against the backdrop of the US Federal Reserve (FED) potentially raising interest rates again at its upcoming May policy meeting.
Latest labor data revealed that US initial jobless claims rose for a second straight week, increasing by 5,000 claims to reach 245,000. This indicates that the labor market in the world's largest economy is gradually cooling off as economic activity shows signs of decelerating.
In March, US retail sales dropped for the second consecutive month, declining 1% compared to February—considerably worse than the 0.4% contraction forecast by analysts. Shrinking retail sales inevitably elevate inventory levels at distribution channels, triggering cutbacks in new manufacturing orders and adversely affecting industrial manufacturing activities.
Mr. Christopher Rupkey, Chief Economist at financial research firm FWDBONDS (USA), noted that the market can firmly conclude the US is entering a recession.
Concurrently, the US Department of Energy reported that domestic petroleum stockpiles increased by 1.3 million barrels last week to 223.5 million barrels, contrary to consensus market forecasts of a draw. Estimated US fuel consumption is currently down 3.9% year-on-year.
Nonetheless, analysts anticipate this demand contraction will prove short-lived as the market transitions into summer—the peak travel season. US WTI crude prices are projected to oscillate between $70 and $75/barrel in the near term.
The market is also closely assessing the impact of Russian crude supplies following reports that oil shipments from its western ports in April 2023 could reach 2.4 million barrels per day—the highest level since 2019. Pakistan likewise announced it will import Russian crude for the first time, with volume potentially reaching 100,000 barrels per day.
Additionally, Reuters reported that China may trim petroleum export quotas in its upcoming allocation round due to rising domestic fuel demand, which could tighten regional refined product supply across Asia.
Source: Tapchicongthuong.vn
