Opec production increase expected to keep oil prices low
With the conflict between Israel and Iran easing, oil demand in China becomes a more important factor affecting global crude prices, as the mainland's manufacturing sector started to recover last month following slow economic growth, according to TOP analysts.
The Texas crude oil reference price is expected to range from $60-70 per barrel this week, while the Brent crude benchmark should swing between $63 and $73 per barrel for the period.
Oil price fluctuations were a major concern of the Thai government over the past several weeks, especially during the 12-day Israel-Iran war last month, as there was fear that their confrontation would escalate.
If Iran closed the Strait of Hormuz, oil transport in the Middle East would be disrupted, which would drive up global oil prices.
Thailand is using the Oil Fuel Fund as a buffer against a surge in crude prices.
Authorities said earlier they curbed domestic oil prices by collecting fewer contributions to the fund from users of diesel, gasoline and gasohol.
Oil excise tax reduction will be the next tool to control the retail oil price, but this must be done carefully as a healthy economy should focus on revenue generation, Finance Minister Pichai Chunhavajira said earlier.
TOP analysts said oil prices should remain low and stable this week as Opec and its allies, known as Opec+, plan to increase oil production in August.
Kazakhstan, a member of Opec+, is likely to increase its oil production after state energy companies decided to adjust production forecasts for 2025.
On the demand side, in addition to the Chinese economy, the impact of US tariffs on global trade could slow oil demand, said TOP analysts.
US President Donald Trump has changed the date of implementation and may announce new tariff rates on imports from many countries on Aug 1, according to media reports.
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