The current situation of decreasing oil prices after an initial increase is the second instance of this phenomenon in the last six months. The reason behind this pattern could be linked to worries regarding the severe worldwide economic downturn.
On April 25th, Mr. Joe Biden declared his intention to run as a candidate in the upcoming presidential election in the United States of America in 2024. Currently, there remains a lack of clarity regarding which individual may emerge as a viable contender for the position of serious competition within the Republican Party. According to the most recent survey conducted by Reuter, Biden is currently enjoying a popularity rating of approximately 39%. It appears that the onset of election campaigns can result in anticipated alterations within the financial markets.
The recent proclamation of economic advances within China has reportedly resulted in an uptick in Russia’s oil exports to China, with an approximate daily export of 2.26 million barrels of oil observed in March.
During the week ending on April 21, the American Petroleum Institute (API) reported a reduction of approximately 6.1 million barrels in the oil reserves of the United States. This figure surpassed the anticipated drop of approximately 1.5 million barrels, as projected by esteemed analysts. Over the course of the previous week, a decrement of approximately 1.9 million barrels in American gasoline stockpiles was recorded, with a concomitant augmentation of nearly 1.7 million barrels observed in other fuel inventories. Anticipatory prognostications had suggested a marked escalation in the value of petroleum subsequent to the release of the aforementioned communication. However, on the Thursday following the announcement, the price of Brent crude oil surpassed the 70 US dollar threshold and ultimately registered at 77.98 US dollars.
The present occurrence of a decline in oil prices following an initial uptrend, despite OPEC’s implemented oil reduction measures, marks the second such event in the past half-year. This trend can be attributed to concerns regarding the profound global recession.
While certain analysts predicted an escalation in oil prices to surpass the threshold of 100 USD by the culmination of 2023, others expressed a sense of apprehension by attributing the supply reduction by OPEC to the impact of the worldwide economic downturn and the imperative to thwart potential price declines. The technical trajectory of crude oil manifested bearish indications in the previous week.
On the 26th of April, HSFO CST180 of Singapore experienced a reduction of 10 USD, contributing to its current value of 454 USD. Likewise, the price of bitumen also decreased by 5 USD, resulting in its current value at level of 465 USD.
Middle East country’s situation
In the context of South Korea, the price of bitumen witnessed a reduction of 5 USD, culminating in a total cost of 430 USD. The prevailing cost of bitumen in Bahrain has remained constant within the range of USD 370. According to current projections, it appears that the prices of bitumen in India will remain stable as of 1 May, despite the persistent and considerable demand for said product.
Nevertheless, the pricing of bitumen in Iran remains subject to intense competitive pressures stemming from the acquisition of VB and fluctuations in currency exchange rates. Moreover, the current trend in exports does not appear to be showing a positive trajectory.
Over the course of the recent week, a sizeable proportion of the bidding activity for the procurement of VB was found to be concentrated among the various refineries located in Iran, amounting to an estimated 77%. This figure marks a notable decrease from the preceding weeks’ levels. Nonetheless, the current level of competition remains considerably elevated.
According to recent reports, the precarious state of the market remains volatile and additional fluctuations are anticipated.
This article was prepared by Shirin Yousefi, the Content specialist and market analyst of Infinity Galaxy
