Weekly Bitumen Report: The Oil Shock on 7 September and its Impacts on the Market

Based on the latest economic reports and investigating the different economic indexes in the world, most analysts believe that the rate of commodity production is lowering in the world can be because of a reduction in consumption and normally, the energy demands will decrease too.

This was enough for OPEC to reduce oil supply by around 100K barrels per day since 1 October, while some of the members disagreed with this decision. But, this decision did not have any positive effect on the market trend, and the price shock in the energy market occurred on 7 September, and brent Oil reached less than 90 US dollars. Accordingly, Singapore HSFO faced a fall of 28 US dollars, and Singapore and South Korea bitumen decreased by 5 US dollars, too.

This fall in prices coincided with the official announcement of Ukraine about Russia’s position on Crimea and the increase in the level of USA oil reserves. Besides, some other commodities like gold observed a fall in their prices.

In the meantime, Iran decreased the average vacuum bottom by around 7% on 7 September, but it is not clear if this oil shock will be recovered soon or not?

Also, after the end of the Round 8 of JCPOA negotiations, there is not any clear outcome; this situation might affect the USD equity against Rial.

It seems that we still have to observe the various political events to obtain a more accurate analysis of the situation.

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