Iran’s bitumen prices jumped by 30 USD following the introduction of a new regulation on October 25, with uncertain implications for exports.
On Wednesday, and following two days of declining crude oil prices, the market remained relatively stable due to concerns about decreased demand in Europe offsetting worries about supply disruptions in the Middle East caused by the conflict between Israel and Hamas in Gaza. Crude oil futures reached 88.13 USD per barrel with a slight increase.
In Europe, economic activities within the European Union experienced a slowdown in October, and this anticipated recession could impact the outlook for crude oil. Euroilstock data indicates that oil refineries in the region are expected to consume less crude oil during this economic downturn.
In the Middle East, various countries are working towards a ceasefire between Israel and Hamas to provide humanitarian aid to Palestinian civilians. Additionally, the reduced risk of an Israeli ground attack on Gaza contributed to the decrease in crude oil prices.
However, there are factors that could support crude oil prices. China, the world’s largest crude oil importer, approved a 1 trillion-yuan (137 billion dollars) sovereign bond issue that could improve its economic situation. Furthermore, a reduction in crude oil reserves in the United States, the largest consumer of crude oil, has supported prices. According to the American Petroleum Institute, sources announced that U.S. reserves were expected to decrease to 2.7 million barrels in the week ending on October 20, while eight analysts in a Reuters survey estimated a 200,000 barrel increase.
Meanwhile, Japan has requested increased oil supply from Saudi Arabia and other producers to stabilize prices. These conflicting developments have led to daily fluctuations in the direction of crude oil prices.
On Wednesday, Singapore’s HSFO CST180 fell by 9 USD and reached 473 USD, while bitumen prices in Singapore closed at 520 USD.
South Korea’s bitumen price remained stable at around 420 USD, and Bahrain bulk bitumen was traded at 415 USD. With a slight increase, bitumen prices in Europe reached a range of 480-560 USD.
As Diwali festival approaches in India, the market is experiencing some economic slowdown, and the decision of Indian refineries regarding price announcements on November 1 is still unclear. Nevertheless, a slight growth or price stability can be expected.
Predominant Factors in the Iran’s Market
After several weeks of uncertainty in the Iranian market, a new circular concerning the exchange rate was released on October 25. The impact of this circular on exports from Iran is yet to be determined, and market reactions to these new conditions need to be observed more closely in the coming days.
This article was prepared by Shirin Yousefi, the Content specialist and market analyst of Infinity Galaxy
