Weekly Bitumen Report: Price Growth & Market Uncertainties
Traditionally, there is a direct relation between oil price and the Middle East geopolitical situation, but this time, oil market is anticipating the rise or reduction of tension between Iran and Israel.
Vandana Hari, the financial market analyst, believes that after Iran’s attacks to Israel, there was not any other tension between the 2 countries and the markets will gradually return to the previous levels of the prices before the current tension. The main reason can be mostly the markets uncertainties, as it cannot be clearly stated what will occur or maybe it can be cautiously said that nothing has changed till now.
However, although crude oil is being sold from the Middle East and strait of Hormuz which is a passageway for 17% of the world’s energy, remains open despite all tensions, it is impossible to imagine that the Middle East today is exactly the same as the Middle East last week, as the tension between the 2 countries were not symbolic and nobody is aware of the next movements in the region.
In the meantime, the ratio of oil demand and supply is still growing. However, there are issues for the supply recently that led to the reduction of oil production and the global oil reserves that usually increase in the first 6 months of the year, remained unchanged. In case OPEC+ does not increase its supply, the oil reserves will decrease in the second half of the year and the prices will increase again.
The next potential risk of the market, in addition to the security tension in the Middle East, is the implementation of new sanctions against Iran by America. Considering the increase in production and export of Iran’s oil during the recent years, the new sanctions might lead to another rise in oil price, and Russia will be the only party benefiting from these events.
Contradictory statistics are being received about China’s economy. On one hand, some published reports show more recession in the country and on the other hand, based on the official data, China’s GDP increased 3.5% in the first trimester of 2024 compared to the last year, and this growth was beyond the previous predictions.
In America, Federal Reserve has not officially announced the changes in interest rate yet. Overall, it seems that the world is facing uncertainty about the future in the current conditions.
On Wednesday, Singapore’s 180 CST recorded at 516 USD, bitumen price of Singapore and South Korea were traded at 410 and 400 USD, respectively.
Bahrain’s bitumen is still stable at 380 USD.
In Europe, the range of bitumen price was observed at 467-510 USD.
On April 15, India’s bitumen price increased 7.9 USD. India is approaching the election and this surge in bitumen prices shows the depth of market fundamental impacts on the prices.
In Iran, despite all the problems such as heavy rain and storm in Bandar Abbas, Persian Gulf, and UAE, and the slowness of port operations, bitumen price kept rising. After several months, a significant competition for vacuum bottom with an average of 8.5% was recorded during the last week. On Saturday, the base price of Iran’s vacuum bottom will probably increase significantly.
The most important components of the current bitumen market are the potential risks and ambiguities in market fundamentals. Hence, Infinity Galaxy company advises all the role players of the market to observe market trends carefully and make their future decisions cautiously.
This article was prepared by Razieh Gilani, the export manager of Infinity Galaxy.
