DUBAI, Arab Emirates, April 21, 2022 (Newswire.com) – Oil price, freight costs, and vaccinations are not the only fundamentals that affect bitumen and petrochemicals. BitumenPrice.org company, a pioneer market analyst and bitumen supplier, has released an observation of all the price factors of the recent market:
The covid pandemic, global shutdown, and quantitative easing policies have now led to hyperinflation in many countries. The US inflation is currently at a 40-years-high level. The US Consumer Price Index (CPI) increased 7.9% in February 2022 compared to one year before. European countries have also reported a higher inflation level. Prices are skyrocketing and fears are rising that the economies get into a 1970s-like crisis when oil prices spiked up and pulled prices high. More people were jobless every day and the economy had no growth.
When oil prices increase drastically-same as the situation of crude since December 2021, manufacturers eventually halt production and unemployment increases. The US current unemployment rate is falling to the pre-pandemic levels; therefore, we might only be facing temporary inflation as in the Spanish Flu in 1920.
“It’s definitely not a stagflation issue,” John Williams, New York Federal Reserve Bank President, said. Fed officials believe that raising interest rates can fight back hyperinflation. Moreover, the VoxEU study shows that inflation typically rises sharply following the war, but not following the pandemics.
The threat of WWIII after the attack of Russia on Ukraine has been a super stimulator for inflation. Russia, one of the biggest oil and gas suppliers in the world, is under heavy sanctions. The US and Europe are trying to replace Russia with other competitors such as Iran, Venezuela or their strategic oil reserves. Eliminating Russia from the oil and gas sector means nearly a 10% gap in the oil and gas market.
Crude oil passed over $120 under the pressure of the tensions. The US tries to tame the prices by releasing large amounts of its Strategic Petroleum Reserve (SPR).
The ocean freight costs have not been kinder to petrochemicals. Demand has spiked up but the shipping companies do not have enough capacities. As reported by DHL, port congestions and vessel delays are soaking up 10% of the supply. There will be no real capacity increase before 2023; therefore, schedule reliability remains low. Gas and fuel are sharply increasing along with oil. Considering the obstacles, 2022 can be a rough year for shipping companies.
The multitudes of fundamental variables have brought market confusion and decelerated construction projects. Traders can refrain from making hasty decisions by consulting with pioneer suppliers. You can find the bitumen price in India and other countries in addition to the latest market reviews at bitumenprice.org. For more information, please send an email to email@example.com or ask questions here.
Source: Bitumen Price