Weekly Bitumen Report: Confusions Over Oil and Pandemic

The market has been acting confusingly after the decision of OPEC to increase production, and the fear of the Delta variant outbreak and its unclear global outcomes. Oil price experienced several ups and downs from 68$ to 72$ within the week. The fluctuations resulted in confusion of buyers in the markets of commodity whether it is the proper time to finalise any deal or not. Some oil analysts still believe prices will reach up to $80 per barrel until the end of summer. However, many of the clients expect a decrease in oil prices. USA crude oil inventories also increased about 2 million barrels leading to a drop in oil price on July 21. The recent COVID-19 lockdowns are affecting the level of demand negatively. Moreover, the Eid holiday in UAE and the closure of banking systems slowed down financial transactions. Sellers were reluctant to trade in this dilemmatic condition. As a result of the virus outbreak in Iran, the government implemented a six-day lockdown in some parts of the country. Banks and capital markets, including the stock exchange, are all closed. European countries are encouraging their citizens not to leave the countries because of the COVID-19 outbreak, and the consumption of jet fuels dropped consequently. The current global inflation, caused by the capital injections, will increase oil prices as well. Indian refineries raise bitumen prices by about $5. The rates stability is not far from the mind as the monsoon is expected to continue longer in some states. The consequence of the Jebel Ali explosion on July 8 is appearing gradually. Port congestion and vessel delays are causing inconsistencies in the shipments. Iran is challenging its political transformation. The currency market did not have any significant fluctuations, and it was almost stable. On Saturday, new prices for vacuum bottom will be released. It seems that it will be either in the same current range or change about 1-2$ in maximum.