Weekly Bitumen Report: The Smooth Days of Market after the Stormy Decision of OPEC

The market passed quiet days during the last week and the difference between the lowest and highest rate of crude oil was around 2 US dollars and it was fluctuating in the range of 91-93 US dollars. Also, the average of HSFO CST180 FOB Singapore was almost unchanged in the level of 383 US dollars.

In the UK and after 45 days of new cabinet formation, Liz Truss the prime minister resigned. Meanwhile, the chief secretary to the treasury and home secretary resigned in the last 4 days too and the internal crises of United Kingdom reached its highest level along with the inflation so that the economy of the sixth power of the world got escalated during the last 40 years.

It is heard that US Dollar Index (USDIDX) is around 112.48 which is capable of exceeding 115 units too. This matter led to the equity of US dollar up to 83 Indian Rupees on Wednesday that was unprecedented in India history.

All of these factors can be the serious signs of recession in the world’s economy in a way that oil price after OPEC’s about 2 million reduction of production returned to the range which was observed before the announcement of OPEC’s decision.

Bitumen price in India increased 15 US dollars on 16 October. Although, there are significant demands in India market, the worries of recession did not let the producers face a dynamic market before Diwali festival like previous years.

On the other hand, based on unofficial and initial estimations, India will face another increase up to around 12 US dollars on 1^st November.

At the same time, during the last 2 weeks, Iranian refineries came up with more than 14 supplies in IME and the average competition was around 48% on the base price of vacuum bottom.

The bulk bitumen of Singapore was unchanged in the range of 550-560 US dollars during the week. Bahrain and South Korea bulk bitumen did not record any considerable change and were almost stable in the range of 425 and 490 US dollars, respectively.

It seems that the current situation is not desirable to both importers and exporters and the market requires new stimulant to increase the export volume. It can be said that decision of OPEC about the cut of 2 million can have a serious effect on the improvement of the market.

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