Weekly Bitumen Report: Market Anticipating Oil Price Direction
BRICS leaders have reached an agreement to expand the BRICS group by welcoming Iran, Saudi Arabia, the United Arab Emirates, and three other countries. This marks the first expansion of BRICS since South Africa joined in 2010.
Narendra Modi, the Prime Minister of India, stated, “I believe that with the entry of these countries, we will infuse more energy into the organization.”
Analysts believe that the expansion of BRICS will strengthen the countries known as the Eastern Bloc and further enhance China’s and Russia’s influence in Africa, consequently reducing the dominance of the dollar in global transactions.
By deepening the real estate crisis in China, one of the largest real estate companies, “Evergrand,” based in China, has declared bankruptcy in the United States. This move comes at a time when troubles in the Chinese real estate market have added to concerns about China’s economic situation.
China’s economic growth has slowed, its exports have declined, and youth unemployment has hit a record high.
Meanwhile, China has reduced short-term loan interest rates to tackle the economic crisis. In a recent move, the Chinese government left long-term interest rates untouched but lowered the base rate for one-year loans from 3.55% to 3.45%.
As worries intensify about China’s economic situation, oil prices experienced a slight decrease throughout the week. However, global markets appear to be awaiting interest rate determinations. The officials of the US Federal Reserve of the United States, policymakers of the European Central Bank, central banks of the UK, and Japan are set to negotiate at the annual Jackson Hole meeting in 2023. The decisions made in this meeting might impact global financial and energy markets.
During the first three days of the week, the price of HSFO 180 CST in Singapore exhibited significant positive and negative fluctuations, ultimately settling around $550 by Wednesday. Singapore bitumen price also remained unchanged at approximately $460.
South Korea bitumen price experienced a $5 decrease, settling at $415.
The price of Bahrain bitumen remained unchanged at $440, while European bitumen prices slightly decreased, ranging from $520 to $580.
In India, after a mid-August increase, the price of bitumen managed to recover $50 throughout August, and there is speculation of another increase in early September.
In Iran, on August 23rd, the base price of vacuum bottom bitumen increased 4.5% to bring about a clearer market direction. Despite customer pressure for price reduction, it seems that if the trend in oil prices becomes more defined, prices may continue their upward trajectory due to the end of maintenance and the start of the bitumen export season.
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This article was prepared by Razieh Gilani, the export manager of Infinity Galaxy (www.infinitygalaxy.org).
