Weekly Bitumen Report: Sudden Direction Change of Oil Price and Shock in the Market
After several weeks of observing an uptrend in Brent crude oil prices, it fell below 90 USD, and even OPEC+ emphasis and its 50th meeting on Wednesday which was about the previous agreements to reduce production level could not lead to the recovery of oil prices to above 90 USD.
The main reasons for this fall can be attributed to the empowerment of US dollar, the possibility of another surge in interest rate, and the fall of demand by traders. It seems that crude oil requires another catalyzer through demand or supply to reach above 100 USD.
Based on published data on Tuesday, job opportunities have increased to the highest level in the United States within the last 2 years that led to more productivity in the treasury bonds. In addition to this matter, the fear of high interest rate for a longer period affected oil prices that US dollar empowerment can lead to the fall in demand as crude oil becomes more expensive for the holders of other currencies.
In the meantime, in an interview with BBC, the secretary general of OPEC stated that fall in crude oil prices will not happen soon. He also claimed that decision of OPEC members to reduce production till the end of next year can lead to significant shortage of oil supply in the global market and crude oil price will even exceed 100 USD.
At the same time, City Group predicted that global market will move toward uptrends and have a decreasing view to crude oil prices. The institute estimates the average price of crude oil in the fourth trimester of year up to 82 USD and the estimated price of 2024 will be 74 USD.
By the fall in crude oil prices during the last week, Singapore’s HSFO CST180 settled at 490 USD. Singapore’s bulk bitumen price exceeded its fuel prices and reached 515 USD and South Korea’s bitumen price at 430 USD.
Bitumen price in Bahrain is still unchanged at the level of 440 USD and European markets faced the rates of 550-600 USD.
On October 1st, bitumen price in India increased 11 USD, and it was predicted to see another surge in the mid of October before the fall of crude oil prices, but now it is not clear if the expected rise will happen or not.
In Iran, although bitumen prices remained at the previous levels, the effects of fall of crude oil prices in this market is not explicit in the short term. However, the prices have not changed significantly yet.
It seems that market is anticipating for the next movements of crude oil to find a more transparent direction in coming days.
Stay in touch with Infinity Galaxy team to check your bitumen inquiries. This article was prepared by Razieh Gilani, the export manager of Infinity Galaxy.
