Inflation within the United States has exhibited a reduction in trend, which has led to a possibility of the Federal Reserve opting to terminate the increment of interest rates within the ensuing month. Therefore, it can be argued that the depreciation of the US dollar is likely to occur. Nevertheless, certain analysts posit that there exist several factors that could potentially impact the 2% advancement of the USD index over alternative currencies. One salient determinant pertains to concerns regarding the US debt ceiling negotiations, the soundness of banks, and the overall outlook of the global economy. These apprehensions have resulted in a bolstering of the US dollar’s worth as a secure and dependable reserve currency.
In April, the USD index registered a notable growth of approximately 2% and attained a threshold of approximately 103 USD. Nonetheless, it is worth noting that there exists a disparity of 10% compared to the peak value of 114.78 USD, reported in September. This serves as a significant consideration. The US index quantifies the United States’ monetary value to six other currencies.
Meanwhile, as reported by Oilprice on Thursday morning, the value of petroleum experienced a 1% decline as a result of apprehensions surrounding the indebtedness of the United States and the poised threat of a major default. This decrease came shortly after a day of gains that were contingent on the favorable demand trends observed in the country. Bloomberg reports that concerns have arisen among financial experts on Wall Street over a possible economic impact of $1 trillion, should the issue concerning the debt ceiling remain unresolved.
Moreover, the foremost Oil Market Report by the International Energy Agency reveals that the anticipated global demand for oil will surge to 102 million barrels per day. China has taken the lead after registering a notable increase in its oil consumption to approximately 16 million barrels per day, two months beforehand.
According to the International Energy Agency (IEA), there is an anticipated significant increase in demand for oil of 2.2 million barrels per day (bpd) for the current year.
One week ago, the Organization of the Petroleum Exporting Countries (OPEC) released its most recent Monthly Oil Market Report. While OPEC maintained its global oil demand growth projection, it did modify its outlook for Chinese demand, upwardly revising the expected growth rate from 760,000 barrels per day (bpd) to 800,000 bpd.
Despite the emergence of encouraging economic updates, the price of oil exhibits a significant level of resistance toward an upward trajectory.
On May 16th, the price of Singapore’s HSFO CST180 experienced an increase of approximately 5 USD. Conversely, on May 17th, the price of the same commodity suffered a decline of approximately 10 USD. The factors of pressure and instability pertaining to prices have resulted in Singapore’s bulk bitumen retaining a value within the 480 USD range. In contrast, the price of South Korea’s bitumen has exhibited a 15 USD increase and is now valued at 420 USD.
Throughout an additional seven-day period, the trading of Bahrain bitumen occurred at a static value of 370 USD.
As anticipated, the cost of bitumen in India decreased by approximately 8 USD on May 15th. This decrease is expected to continue in the coming month of June, owing to the onset of the monsoon season.
Conversely, Iran encountered a convoluted predicament. Whilst there has been a minor upsurge in the price of bitumen in Europe and Singapore over the course of the previous week, the price of Iran bitumen experienced a decrease to a certain degree as a result of market demand pressures. Notwithstanding the anticipated price increase resulting from heightened demand in East Asia and Africa, as well as significant competition among refineries, the cost of bitumen in Iran has remained stable.
It is apparent that the market has entered a novel phase of the economic downturn which necessitates the reception of more formidable indications to facilitate its alleviation.
This article was prepared by Shirin Yousefi, the Content specialist and market analyst of Infinity Galaxy