China's top economic planner has announced its seventh fuel price cut this year and the fourth consecutive cut in recent months. Gasoline and diesel prices have been slashed due to the global glut in oil supply worldwide and weakened domestic demand.
The National Development and Reform Commission says gasoline retail prices will be reduced by 220 yuan per tonne and diesel by 215 yuan per tonne.
This means the unit price of number 90 gasoline will be cut by 16 cents, and the unit price of number 0 diesel will be 18 cents cheaper.
The price cut has been widely expected as global oil prices continue to decline.
Brent oil has fallen under 50 US dollars a barrel, the lowest in six months, due to a boom in production and a sluggish global economy.
"One thing we've discovered is that fuel prices are set to drop after it goes above 60 dollars a barrel, and are bound to rise when it hits 30 dollars a barrel. So in the mid-to-short term, I believe fuel prices will stay around 50 to 60 dollars," said Xu Xiaojie, researcher of Chinese Academy of Social Sciences.
The U.S. Energy Information Administration shares that optimism.
The E-I-A's forecast for fuel prices within the next year and a half is between 65 and 75 dollars a barrel.
But its administrator Adam Sieminski says multiple possibilities exist, and fuel prices could potentially be as low as 30 dollars a barrel.
"The most recent thing is the agreement reached with Iran on sanctions, and that could actually add more oil to the market, and EIA's view would probably have an impact of about five dollars, maybe about ten dollars a barrel lower oil prices because of Iranian oil in the market," said Adam Sieminski, administrator of US Energy Information Administration.
Analysts say fuel prices will likely remain stable in the third quarter, and an upward movement is expected next year as global markets begin to rebound.
