Weekly Lubricant Report: The Promising Movements in the Market after the Long-lasting Recession

On Monday, 1st August, oil markets opened with oil below 100 dollars, while reports from Singapore showed the slowing economic growth in China and Japan, fears of a resurgence of the Coronavirus, and re-quarantine in China. These reports illustrated that China could not reach zero corona in July, this fear caused the price of oil to drop below 100 dollars.

Currently, the eyes are on OPEC meeting on Wednesday to understand how OPEC’s decision is to increase production for the coming months or not.

Also, the reports that the production rate in Japan has decreased to the lowest level in the last ten months have intensified the concerns.

Meanwhile, in Iran, after the drop of about 10-16% of all petrochemical materials and oil products, almost after the announcement of a 16.5 dollar drop of bitumen price in India and approaching the end of the monsoon season, competition in Indian markets for petrochemical products increased.

As Infinity Galaxy mentioned in the previous reports, there has been little movement in the petrochemical markets after a period of near stagnation.

During the past week, there were no serious fundamental events in the market that would have a major impact on prices, and as mentioned in Monday’s Vodcast, it seems that the price of oil will have a short-term drop and then continue its upward trend.

These conditions caused that despite the high cost of production and raw materials in Iran, the price of recycled base oil of Iran, FOB Bandar Abbas, decreased by 880 to 890 dollars, and the price of paraffin wax 3 -5% decreased 1250 to 1300 dollars and the price of caustic soda flakes changed to around 620 to 650 dollars.

However, it seems that the current conditions in the market are the result of inflationary stagnation and various events that all active people in this field should be careful of the risks in the market for any purchase and sale.

It is better to avoid heavy investments for the time being until the conditions for long-term investments are prepared.

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