This decision made Brent Crude Oil price increase up to 70.62 $ on 2 June 2021. Crude finally succeeded to reach above 70 during the first week of June. On Friday, Brent closed at $71.27 and WTI closed at $69.38. Several stimulations helped the oil, including the OPEC meeting and dollar devaluation. Currently, Brent and WTI are at the strong statistic zone of $70 which they could not pass about 3 months ago. The chart is not also strong enough for hitting the top of the channel. However, OPEC and other major powers are trying to support crude and petrochemicals.OPEC+ is apparently fully controlling the oil market at the moment. After the meeting on Tuesday, the market neglected all the oversupply possibilities and oil thrived for higher prices. OPEC declared that they still expect more demand until the end of the year and they are planning to gradually increase the production considering a better Covid situation.Besides the OPEC+ decision, dollar devaluation helped the oil and commodities to rise. The dollar index experienced about 0.60% fall after the negative reports of nonfarm payrolls of the USA. The reports indicated that inflation has not improved the employment rate.Although it caused a negative sentiment for the dollar, the economy is not in danger as we can see improvement in the rates of wages and unemployment. In the last week of May, Brent closed at $68.74 and WTI closed at $66.60. The market was green but there was no sign of powerful purchase. Crude did not get to their last high prices and the trend seems to be weak. Technically, the chart is not still determined to move up further. However, we cannot ignore fundamental views, such as the important meeting of OPEC on Tuesday. The final decision of the meeting may change all variations.
In Iran (BAIEX 2021) The 12th international exhibition of Bitumen, Asphalt, Insulations and related Machinery (BAIEX 2021) was held during 27-30 . The political atmosphere of Iran is getting critical by approaching the day of the presidential election, and the bitumen market is always under the shadow of these political situations. The market of foreign currencies like the US Dollar is still unclear and unstable. Although the nuclear agreement is still under discussion and analysts forecast that it will happen in near future. By the agreement, the fall of dollar value against Rial is definite.On the second day of June 2021, an oil refinery in Tehran caused heavy damages and its effects emerge on petroleum products within the next weeks. Although Iran-US negotiations have not ended, their deal is highly possible. Goldman Sachs still predicts an $80 price even though Iran is coming to the market. Iran will go on a short holiday from 4 June and the market will run from Monday again. It is highly probable that the new vacuum bottom price will be released the same day. Based on the obtained news from official sources, up to the time of preparing this report an increase of 2.6% will happen.The news indicates that yesterday, on Wednesday evening, a large fire occurred due to a leak in one of the Tehran refinery’s oil tanks. It could affect the price of Iran’s petroleum products in the coming weeks. While there are hints that the tight supply condition for base oil and lubricant has started to ease, the remaining shortage of containers and vessel space affected transactions and trading procedure. Prices of base oil and lubricant were generally more stable than last months but the recent increase in oil price might change the market scenario again. This ambiguity exists while the situation of the USD is not stable yet and fluctuations continue to keep the market irregular. The oil products experienced a calm market last week.
In IndiaThe large market of India was affected by the new disease of “black fungus” and the monsoon season. Besides, oil demand is clearly improving due to the acceleration of vaccination programs and the economic recovery in most parts of the world. However, the monsoon is about to start in India within the coming weeks and the importers are not willing to import goods in large volume.India’s base oil demand is likely to recover from July due to the fall in the number of Covid-19 cases and a continuing vaccination help to ease lockdowns and support consumption. India was about to take a step forward with an easing in Covid-19 restrictions but the country’s cases increased again since last week when cyclone Yaas slammed into the country’s eastern coast. Reports indicate that Indian Lockdowns are extended in June.
The OPEC meeting will also change oil products by setting projections for the oil market. Along with oil, petrochemicals prices grew as well. Yet they can go for better prices if crude does not fall suddenly. Petrochemicals demand is also improving in big countries such as China and India. US crude oil inventories decreased 1.66 million barrels last week. Oppositely, gas and oil rigs increased to 359. It was a rough week for big oil, including the loss of Royal Dutch shell in a legal case on emissions of the end-users burned fuels. It was a warning sign for the other parties about possible litigation about emissions. Despite the long period of putative easing of the central banks during the pandemic, some countries have signaled the market for new tapering policies, including Britain and Europe. The market has been in relative fear which will be totally come true if the U.S central bank defends in their upcoming meeting in the first week of June. If central banks decide to impose new policies and increase interest rates, commodities will decrease as the shock of the dollar empowering.