Weekly Bitumen Report: The Simultaneous Rise of Crude, Fuel, and Bitumen
During last week, Taiwan unveiled its first domestically made submarine to empower its defense milestone against the probable attack of the Chinese army. Most of the supervisors believe that China does not have any plan of immediate attacks on this island and China’s government is looking for a peaceful reunion with Taiwan. It is not clear if these tensions might have any impact on China as the second economic power in the world and oil prices.
According to the EIA report, the annual American oil reserves decreased 3.31% which was the highest fall since last December. In the meantime, the future prices of WTI increased to 93 USD . It is the highest surge since last October. The storage of crude oil in Cushing oil storage of Oklahoma reached its lowest level within the last 14 months due to strong demand for refinement and export and it caused worries about the quality of oil.
In 2014, when the level of this storage center dropped below 20 million barrels for the last time and due to a price increase in the hub, its oil capacity was recovered quickly. Besides, the United States was not a crude oil exporter at that time because of a 40-year ban that was lifted in 2015, hence, currently, there are more doubts about the rapid fall of crude oil prices.
At the same time, on Wednesday, Morgan Stanley Bank, increased crude oil prices to the level of 90-100 USD for 2023 & 2024 in its trimester forecast considering the low possibility of supply as a result of voluntary cut extension by Saudi Arabia and Russia.
During the last week, crude oil prices reached an unprecedented level of 97 USD as a result of:
1. Fall in the oil storage level in America
2. Temporary ban on fuel oil export by Russia
3. Possibilities for changes in interest rates in America
In the meantime, Singapore’s HSFO CST180 increased significantly on Wednesday and touched the rate of 545 USD on Wednesday and its bitumen price reached 530 USD, accordingly.
Bitumen prices in South Korea increased by 5 USD to reach the level of 445 USD.
Bahrain’s bitumen prices still remain unchanged at 440 USD and the European refineries experienced prices of 550-600 USD.
Bitumen price in India seems to follow an uptrend by the end of the monsoon season and increase in demand from 1st October, but it seems that the shortage of containers in Bandar Abbas will have a direct impact on the export procedure and approaching Diwali festival will affect bitumen import in India as well.
Iran’s market experienced a complicated week. The surge of vacuum bottom price and implementation of a new taxing rule on export created a new situation for the exporters to face a considerable rise in their production costs in Iran and the prices of all export products have risen. As a result, IME did not observe any significant competition during this week. The logistic issues still continue in the southern ports of Iran and it created more troubles for the exporters.
Infinity Galaxy team is available to assist market players with its highly qualified services.
This article was prepared by Razieh Gilani, the export manager of Infinity Galaxy.
