Tensions in the Middle East and OPEC+’s choice to cut production could not stop a decline in crude oil prices
Vladimir Putin, Russia’s president, made sudden trips to the United Arab Emirates and Saudi Arabia. His agenda seems to involve discussions on the Ukraine and Qaza conflicts, alongside oil production matters, particularly negotiating with UAE’s leader during their hosting of the COP 28 Climate Summit by the United Nations.
The ceasefire between Hamas and Israel broke on December 1, causing a surge in humanitarian casualties. Simultaneously, Yemen’s Houthi movement attacked Red Sea commercial ships, intensifying tensions in the Middle East. The Ukraine-Russia situation remains unresolved after nearly two years.
Geopolitical tensions in the Middle East, coupled with OPEC+’s production reduction decision, led to a drop in crude oil prices. The uncertainty regarding global fuel demand growth resulted in WTI hitting $60, its lowest since July 2023.
Vandana Hari, from Vandana Insights, believes OPEC+’s decision heavily influences crude oil prices. While further production cuts are justifiable, crude oil has not seen such a significant reduction overall.
Brazil’s president confirmed Brazil won’t be a full member of OPEC+ but will participate as an observer.
Investors’ concerns about demand reflected in the Bloomberg Commodity Index hitting a two-year low. Reduced U.S. exports in October exacerbated commercial shortages.
Updates On Bitumen Market Prices
On December 6, Singapore’s HSFO CST180 dropped $16 to $437, while bitumen prices in Singapore fell $10 to close at $460. In South Korea, bitumen prices reached $385, down $5. Bitumen prices in the European Union ranged from $380 to $450 with some declines. Bahrain maintained a bitumen price of $400.
India is expected to witness further drops in bitumen prices in mid-December, following recent declines.
In Iran, the vacuum bottom market experienced less competition than last week. Exporters and producers are facing a challenging market scenario due to the market recession and the end of 2023.
