“Oil Prices Fall on Fears of US Federal Default: A Look at Domestic and International Prices”

[이코노미스트 민보름 기자] Gasoline and diesel prices at domestic gas stations continue to fall this month.

According to the Korea National Oil Corporation’s oil price information system on the 20th, the average selling price of gasoline nationwide in the third week of May (14th to 18th) was 1627.4 won per liter, down 21.6 won from the previous week. Oil prices have been falling for three weeks in a row since the first week of May.

In particular, the average price of gasoline in Seoul, the most expensive region, recorded 169.72 billion won, down 24.2 won from the previous week. During the same period, the price of gasoline in Daegu, the lowest-priced region, fell by 27.9 won to an average of 1,583.2 won.

Diesel prices also fell for four consecutive weeks, recording an average of 1,468.7 won. This is 36.9 won lower than the previous week.

International oil prices are also declining, so it remains to be seen whether this trend will continue. Oil prices fell this week due to the risk of a US federal debt default and the Energy Information Administration’s (EIA) announcement of an increase in commercial crude oil inventories.

The price of Dubai oil, one of the three major international crude oils, fell 1.4 dollars in one week to 74.1 dollars per barrel this week.

There is also an analysis that the possibility of further rate hikes by the US Federal Reserve System (Fed) is growing and oil prices may continue to fall. Federal Reserve Bank President Logan Dallas said at the Texas Bankers Conference held on the 18th (local time), “There is a long way to go before we get back to the 2% inflation target.”

ⓒThe Economist (“Economic News for Tomorrow” Unauthorized copying and redistribution prohibited)