Weekly Bitumen Report: The Market is Hoping a New Start by the End of Monsoon

On the 169th day of Russia’s war against Ukraine, the critical war situation changed with the attack of Ukraine to Crimean Peninsula. As a result of this attack, the military base of Russia exploded, whose impacts can be strongly felt in the war process.

During the last week and by the publication of a new report by the Federal Reserve, the signs of economic improvement, control of inflation and recession in the USA, and an increase in employment rate in July were observed and as result, the US value was empowered against other valid currencies.

At the same time, the reduction of production in China raised concerns about the economic trend of the world.

These two factors led to the fall of crude oil prices by around 92 US dollars. By the resistance of crude oil price in the channel of 92 US dollars and the multiple crosses of such resistance, some of the analysts believe that the next fall might reach the level of 85 US dollars, but the trend of last days was mostly upward and till the time of preparing this report, it reached up to 97 US dollars.

Considering the various incidents throughout the world, it is difficult to have an appropriate estimation of the crude oil trend.

In the meantime, on July 23, while Iran had decreased the vacuum bottom price up to 16.5% based on the formula, they increased it by 4.7% on 6 August. Interestingly, although the crude was experiencing a downward trend, some of the refineries competed on vacuum bottom up to 8% on 10 July.

On the other hand, a new round of JCPOA negotiations started, and the US dollar value against Iran Rial was devalued which was a factor in the increase in bitumen price in Iran.

It is heard that Indian refineries are planning for another fall in bitumen price up to 44 US dollars on September 1. However, while Singapore faced a decrease in bitumen prices during the last week, fuel and bitumen prices increased on 10 August, and bulk bitumen of Singapore was in the range of 548-552 US dollars.

Although it was predicted to observe a unity signals between the bitumen producer and consumer countries from 1 August, the prediction did not come true by the drop of oil price and the confusion dominated the market.

However, it seems that by the start of September and the end of monsoon, a more suitable situation can be observed in the market, although the main component of bitumen pricing in the market, i.e. Crude Oil, had not found any clear trend yet.

This article was prepared by Razieh Gilani, the export manager of Infinity Galaxy (www.infinitygalaxy.org).