Weekly Oil Report: Mixed Signals Within the Market

Crude oil price dropped by the fear of the recession in the first days of the week. But it recovered as the fear eased down and supply expectations failed. Despite the 12% plunge in the price, it did not cross the blue support in the chart. Brent bounced back above $100 at $100.79 on Friday and WTI closed at $97.59. The oil price seems to be trapped in the range of $91 – 107.5 for more days. The market looks uncertain but now it has more reasons for a recovery to the first resistance at $107. The fear of recession was eased by the new US reports showing that inflation is still here. According to the Bureau of Statistics, US inflation reached 9.1% in June. As it happens, the dollar continues growing. The depreciation of national currencies against the dollar is troubling exporters in several regions and it might worsen. [embed]https://www.youtube.com/watch?v=yEFAbB7xkxM[/embed] Biden finally had his trip to Saudi Arabia. There have been no public announcements about increasing production by Saudi but the situation shows the possibility of a gradual increase. The US does not expect any imminent supply boost. Russia is planning to create an individual national oil benchmark in 2023 to put a cap on its oil price. OPEC foresees a slow down in oil demand in 2023, from 3.36 million bpd in 2022 to 2.7 million bpd. The cartel has been optimistic about the covid-zero situation in China and Russia war in Ukraine. The uncertainty is floating in bitumen and petrochemical markets too. Bitumen prices fell in most countries following the sharp decline in oil. Although oil recovered by Friday, the bitumen market has not much reacted. Only, India increased the price by $5.86 on July 16ths. Bitumen demand is low in areas with normal climates but it is not as dismal as in rainy parts. The new steel drum Bandar Abbas FOB is fluctuating in the range of $405-415 and Singapore is now volatile in the range of $700-$720.