Omicron Variant Resurge Brings Markets Turmoil and Confusion

Last week, Rex Fuels’ Bitumen and Modification bitumen conference took place with more than 250 participants, 20 speakers, and 30 bitumen and petroleum pioneers and partners. Infinity Galaxy was proud to be among Indian friends and customers.

In recent days, the trend of rising prices was stopped by the unexpected news of a new variant of the Covid-19, called Omicron.

While traders and base oil market participants have been waiting for 2022 to return to the consistent situation, recent events and the possibility of further international restrictions and quarantine in many countries confused everyone.

Accordingly, crude fell drastically by the rising Lockdowns and restrictions in Europe, Israel, and gradually in other parts of the world. Oil price is currently in the $70 channel. This could lead to a reduction in global demand for base oils and lubricants as mobility decreases.

Most base oil producers seem to be more available than they were four months ago. It could be the result of buyers and suppliers’ attempts to reduce inventory in the remaining month of the year so that they could avoid taxing unused materials. Some producers, however, were still in short supply and projected to be in short supply by 2022.

Shipping problems are still troubling suppliers and traders. Many shipments in October and November are still in trouble and many are awaiting Adani Port’s legal decisions on restrictions of shipping from Iran to Mundra.

Although the end of the year approaches, recent events have left the market confused about the mobility and demand outlook.

The downward trend in the price of caustic soda has continued due to the re-entry of China into the market. Currently, the price is between FOB $600-650. Demand for this product may increase due to the increasing use of detergents and soaps with the emergence of new variants of Corona.

In the current situation, two scenarios are predicted:

1- If World Health Organization (WHO) declares the urgent of new lockdowns and restrictions again, the market would undergo further price reductions and turmoil.

2- If Pfizer proves the efficacy of its vaccines, we have to wait for the oil and petrochemical fast recovery.

Keep in touch with us to have the latest market changes in the current confusing situation.

This article was prepared by Tina Taghavi, the account manager of Infinity Galaxy. (www.InfinityGalaxy.Org)