Global Bitumen Market Fluctuations after OPEC+ postponement
In a week marked by anticipation and uncertainty, the global bitumen market experienced notable fluctuations, closely mirroring the volatile oil prices and geopolitical developments.
The smooth trend in oil prices experienced a jolt on Wednesday, 22 November, just before the Thanksgiving holiday in the US and ahead of the much-anticipated OPEC+ meeting. This shift saw a significant 4% drop in oil prices, a movement attributed to the unforeseen postponement of the OPEC+ meeting initially scheduled for 25 and 26 November.
Bloomberg’s Wednesday report highlighted underlying tensions within OPEC+, suggesting that Saudi Arabia’s dissatisfaction with the production levels of other member countries catalysed the meeting’s delay. Prior to this development, market analysts had speculated that OPEC+ might not only extend but potentially deepen the reduction in oil supply into the next year.
Concurrently, the International Energy Agency (IEA) presented a contrasting forecast, indicating that even with the extension of OPEC+ members’ current supply reduction agreement, the market could face an oversupply situation come 2024.
Focusing on the Asian market, particularly China, new estimates from British research firm Cornwall Insight revealed a 6% increase in the nation’s general demand for gas consumption. This uptick is expected to intensify in the coming months, positioning China as a formidable competitor against Europe in the gas procurement arena during the winter season.
In Iran, the base price of vacuum bottom witnessed a 4.2% drop compared to the last fortnight. This decrease comes amidst a hesitant attitude among refineries to purchase vacuum bottom, with transactions occurring at base price levels and a noticeable weak demand against potential supply, highlighting market confusion.
In a broader geopolitical context, the mediation efforts of Qatar, aiming to facilitate the release of American hostages and initiate a temporary ceasefire between Israel and Hamas, could potentially bring some stability to the financial markets and the energy sector.
Singapore’s bitumen market recorded a notable shift on Wednesday, 22 November, with HSFO CST180 increasing by 8 USD to 473 USD. Meanwhile, bitumen prices in Singapore and South Korea closed at 490 and 390 USD, respectively, after experiencing a 5-dollar drop.
The bitumen market in Bahrain remained stable at 400 USD, similar to previous weeks. In contrast, European regions recorded bitumen prices ranging from 390 to 450 USD. The Indian market, still reeling from a 7 USD fall in bitumen prices on 15 November, anticipates a further decline of 10-12 USD at the start of December, marking one of the most challenging periods for the Indian bitumen market in recent years, particularly in the post-COVID era.
These developments underscore the intricate interplay between geopolitical events, energy policy decisions, and market dynamics, emphasizing the need for industry stakeholders to remain vigilant and adaptable in an ever-evolving global market.
