Weekly Bitumen Report: How Did the Market Get Confused?

After 288 days of Russia’s war against Ukraine, G7 Group announced its final decision about Russia’s price cap on 5 December. Based on this decision, the price cap of Russia’s oil was determined USD 60. According to the estimations of some authentic experts and analysts such as Standard Chartered believe that the price cap cannot have a serious effect on the price increase in long term as the main importers of Russia have either purchased their required products before or they are buying with more discount without considering the price cap. 

In the meantime, Xi Jinping- China’s president- travelled to Saudi Arabia on 7 December who was welcomed much warmer comparing to President Biden and the analysts believe that can be a new rotation toward China, Russia and Saudi Arabia in the Middle East.

On Wednesday, oil price reached to its lowest level in 2022. However, the experts believe that the dropping trend of crude oil is limited as the fundamental factors are still supporting the previous range and there is not any main downward catalyzer.

On the other hand, some experts believe that the main reason of fall in oil price can be attributed to the increase of production by Russia but till now, there has not been any official report.

Also, on Wednesday, news about the reduction of COVID limitations in China was heard and it seems that improvement in China’s economic situation can be expected.

Bitumen price in India increased around 20 USD on 1 December and the fall of prices is anticipated to be observed in the second half of December.

After several weeks of price stability, Bahrain decreased its bitumen price up to 375 USD.

Singapore and South Korea bitumen price dropped 5 USD and reached 500 USD and 390 USD, respectively.

Unlike the hot competitions over 64% that were observed in Iran during the previous weeks, a record of around 33% was seen during this week and the new vacuum bottom price was observed with 12.9% drop.

On the whole, it can be concluded that the market faced another confusion by the last week events and market players are advised to take their commercial steps with full observation of the market changes.

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