Weekly Lubricant Report: Possible Price Reduction Stimulating Hopes in Lubricants

On Monday, the Brent crude oil price traded around $101 in the world markets, which had a serious decrease compared to last week. It reached below $100 after 5 months, and experienced a start above $100 again.

Until Wednesday, by the time this report was prepared, the price of Brent oil reached around $105. Over the last week, with Biden’s 3-day trip to the Middle East and Saudi Arabia and receiving confirmation from Saudi Arabia to increase production capacity from September, the price of oil was somewhat balanced.

Similarly, Reuters published a report that during the last 2 months, the rate of crude oil buying of Russia by Greece doubled and sent it to different countries, which caused the daily price of oil tankers to rise from $10,000 to more than $40,000. 

These events, along with Putin’s trip to Iran with Mr. Erdoğan to examine the regional conditions, caused the fundamental conditions of oil to be greatly affected by political events and regional conditions.

In general, according to the forecasts and conditions in the market and as mentioned in the Infinity Galaxy vodcast on Monday, in technical analysis, price can have fluctuations in the range of $97 – $107 due to the uncertainty of the market.

It seems that no valid analysis has been published at the moment that shows the increase in the price of oil to more than $110 or a decrease to less than $92.

At the same time, the rise of Corona in different countries and the conditions of severe price drop on fuel oil caused the international markets in the field of petrochemical products, especially lubricants, to be in a state of uncertainty. 

In Iran, forecasts indicate a decrease of between 15% -18% of the base price of vacuum bottom, and at the same time, the bitumen price in India increased by about $6 and reduced its fuel oil price by about $100.

In Bahrain and Singapore, the bitumen price remained stable, but the price of fuel oil in Singapore decreased significantly.

These conditions indicate the lack of stability in the international transactions of petroleum products.

During the last week, the price of recycled base oil FOB Bandar Abbas has been around $950-$970, which has not been welcomed by various countries except India or Southeast Asian countries.

Paraffin is about $1250-$1300 dollars, caustic soda is about $700-$730 FOB Bandar Abbas.

Based on the current situation, it appears that maybe in the continuation of July and the correction of Iranian prices, more ideal conditions for buying will be created, but it is still recommended that buyers be informed about the latest analyzes before buying products.

This article was prepared by Mozhdeh Darbandizadeh, the account manager of Infinity Galaxy (www.infinirtgalaxy.org).