Weekly Bitumen Report: Determination of Interest Rate and Sudden Change of Oil Price Direction

For the sixth consecutive time, the Federal Reserve determined the interest rate without any changes. Its heads stated that as improvement in inflation control has been paused in the United States, so the interest rate will remain unchanged. This is the same level approved in the meeting of the Central Bank in June 2023 which was the highest level during the last 20 years and most of the economist were expecting the same decision.

In the meantime, in the midst of hopes for the ceasefire agreements between Hamas and Israel and the rise in oil storage and production levels in the United States, crude oil fell to its lowest level within the last 7 weeks on May, 1.

The analysts of ANZ Bank reported that the possibility of ceasefire agreements between Hamas and Israel and increase of US oil reserves was the reason of such drop in crude oil prices. However, they also believe that signs of continued inflation and concerns about demand for oil on the brink of the travel season with personal vehicles in the United States may lead to a sharp increase in gasoline demand and another rise in oil prices. In the meantime, in a report by Oilprice, the situation of the current trend of oil prices in the next two months are being evaluated as sensitive.

Besides, Houthi attacks to the commercial ships of the Red Sea is still going on, it might be unstable and in case of any failures in the negotiations of Middle East peace, the prices pull back to their previous levels once again.

On April 30, Singapore’s CST180 reached 528 USD. Bitumen price in Singapore and South Korea recorded at 445 and 410 USD, respectively.

The range of bitumen price in Europe was observed at the level of 460-510 USD.

Bahrain’s bitumen was traded at 380 USD.

Bitumen price in India increased slightly on May 1, around 100 INR and such amount was predicted considering the current election in India.

On May 5, the base price of Iran bitumen will increase around 15 dollars and we should see how this increase will move in conjunction with the direction of oil.

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This article was prepared by Razieh Gilani, the export manager of Infinity Galaxy.