Weekly Bitumen Report: The Stormy January of the Market and Continuity of its record-breaking in Feb. 2022

The best monthly performance of crude oil with a growth of 17% was observed since February 2021. However, the global index of Brent was closed at higher than 91 US dollars on the last day of January 2022 which can be considered the highest productivity of Brent in the last 30 years. The reason for facing such records can be the possibility of supply disorders with the rise of geopolitical tensions in Europe and the Middle East and the increasing growth of demand.
The main concern of the crude market can be insufficient supply. On 2 Feb. 2022, OPEC and its allies decided to increase the daily supply of crude oil up to 400,000 barrels per day from March 2022. However, Goldman Sachs believes that such a decision of OPEC was made as they want to avoid high inflation leads to the slowness of the global economy.
Nevertheless, many of the high-rank banks and oil companies believe that oil prices might reach up to 100 US dollars in the near future.
The abovementioned factors formed a challenging market in Iran and the competition of the refineries varied from 31% to 44% in IME and the highest record of competition and sale of vacuum bottom was registered. The shortage of supply of vacuum bottom and prediction of price increase were the main reasons for these competitions.
The effects of the increasing trend of bitumen price were not only observed in producing countries like Singapore and Bahrain, but also they led to an increase in prices among all of the consuming countries too.
Unlike what was expected by the Indian importers, on 1 Feb. 2022, Indian refineries increased bitumen and furnace oil by approximately 38 and 58 US dollars respectively after two frequent decreases in January. However, most of the analysts believe that the upward trend of the market in India will go on at least till Mid. March 2022.
For example, in December 2021, the average production of local refineries of India was around 574,000 MT and the demand was about 856,000 MT at the same time, this can be enough to see more surge of bitumen prices in India.
Currently, that global economies are not reacting seriously to the pandemic situations and the fundamental factors of the market are getting in line with the technical ones, it seems that the upward growth of bitumen price is still expected to continue.

This article was prepared by Razieh Gilani, the sales manager of Infinity Galaxy (www.infinitygalaxy.org).

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