Weekly Oil Report: Chaos Formed by Mixed News

All Markets lingered in shock of oil as crude suddenly fell by 8% and quickly recovered after. The bitumen market, though, stayed active.

Brent finally closed at $92.11 and WTI settled at $86.19 on Friday.

On the daily chart, you can see how sharply WTI plunged on Tuesday and Wednesday. Traders were all shocked as it happened quickly. The RSI indicates that oil is nearly oversold and it has the potential to grow back.

Yet, the market sentiments are highly mixed and traders are confused. Many experts are making opposite analyses.

After the plunge, many believed that OPEC was warning the world about demand slowdown by the cut. Now, all eyes are on OPEC as the cartel reassured that they would intervene if the oil price drops lower.

The best explanation for last week’s sudden movements might be the intensified fears of recession. The Europe gas crisis and China’s new reports were the main elements. Europe is now in danger of a gas crisis more than ever. Factories and industries are shutting down due to energy shortage in the coming winter; therefore, the production level of the region is decreasing. China, on the other hand, released new reports showing that demand is waning in the country.

Russia’s threats seem to be affecting the market. but the measure is not clear. According to the news, Ukraine has made new progress in northern regions. It might change market sentiments.

Fears also increased in bitumen markets but it did not completely stop purchases. Suppliers and clients are both in trouble with making decisions as they are not certain about oil prices.

All bitumen markets were volatile on September 7th and 8th. Singapore bitumen fell by $10 but the price recovered by $5 on Friday. HSFO price increased by $20 as well.

Currently, Iran’s new steel drum is in the range of $410 – $400. Singapore bulk was $550 – $560, south Korea 60/80 was $510-500 and Bahrain stayed unchanged at $460-$450 on Friday, 2 September.