The outlook for the oil market appears to be turning positive, despite the uncertainty surrounding supply pressures and worries about the demands of the market. According to John Ivans of PVM Institute, one of the primary reasons for this is likely to be the report of the Petroleum Institute of America, which is expected to report a decrease in storage levels in the United States in the past week.
The Russian Ministry of Energy has declared that the voluntary daily reduction of up to 500,000 barrels will be maintained until the end of August. Meanwhile, on July 19, the International Energy Agency and the Organization of Petroleum Exporting Countries (OPEC) confirmed that Iran’s oil production is continuing to rise. As a result, the latest report of the IEA revealed that Iran’s crude oil production reached 3,10 million barrels daily in June 2023, while the price of crude oil in Singapore reached around 80 USD. Singapore’s HSFO CST180, as well as its bitumen, experienced a surge in prices on Wednesday, with the price of CST180 rising to 472 USD and bitumen rising to 450 USD.
The price of bitumen in South Korea has risen by 5 USD, bringing it to 400 USD. Bahrain is expected to see a 20 USD increase in their bitumen price, with the figure reaching 410 USD. In Europe, the price of bitumen has risen significantly, with Spain reaching 500 USD. After four consecutive drops, the Indian bitumen price remained stable on July 15, indicating an improvement in the market. It is anticipated that bitumen prices in India will likely rise significantly on August 1.
In Iran, the devaluation of the US Dollar against the Iranian Rial and the intense competition between refineries for vacuum bottom caused a sharp rise in bitumen prices, resulting in only 50,000 metric tonnes (MT) of vacuum bottom being available in IME compared to the 130,000 metric tonnes recorded. This resulted in a price increase of at least 20 USD from the previous week.
The hot weather and sluggish port operations have posed challenges and impeded the export processes. Nevertheless, it appears that the upcoming month and generally August may be a promising time for the bitumen markets, following a period of recession for a few months.
This article was prepared by Shirin Yousefi, the Content specialist and market analyst of Infinity Galaxy