Bitumen Prices Surge Amid Middle East Tensions, Seasonal Demand, and OPEC Adjustments

Key Takeaways:

• VG40 bitumen prices range from ₹44,332 to ₹47,650/MT, with regional variations influenced by demand and supply dynamics.
• Bitumen prices surged 8-12% recently, driven by short supply and demand upticks from infrastructure projects post-Diwali.
• Global factors, including OPEC's decision to delay production hikes and potential output increases from Iran, add volatility to the petroleum market.

Petroleum Price: VG40 and VG30 Bitumen Price Trends Across India

• For VG40 grade bitumen, the price in Panipat and Mathura stands at ₹46,332 per metric tonne (MT), while in Vadodara, it is slightly higher at ₹46,352/MT. In Haldia, the VG40 grade is priced at ₹47,332/MT, and in Mumbai, it reaches ₹47,650/MT. In Chennai, VG40 is available at ₹44,332/MT
• For VG30 grade bitumen, the price in Chennai is ₹42,012/MT, in Haldia it is ₹45,012/MT, and in Mathura and Panipat, it is ₹44,012/MT. Vadodara offers VG30 at ₹43,912/MT, and Mumbai lists it at ₹44,700/MT.
• Brent crude futures ticked down 3 cents, or 0.04%, to $75.05 a barrel by 0600 GMT, while U.S. West Texas Intermediate crude was at $71.43 a barrel, down 4 cents, or 0.06%. MCX crude oil prices opened at 6012 with a fall of 0.20%.

Petroleum Demand and Supply: Factors Driving Bitumen Prices

• Bitumen prices have surged due to multiple factors, including short supply, supply disruptions linked to tensions in the Middle East, and increased demand following the festive season. Key grades, particularly VG30 and VG40, have seen price hikes of 8-12%, with refineries such as IOCL and HPCL implementing these increases.
• The geopolitical situation has affected the steady flow of supply, adding pressure to meet rising demand, especially as construction and infrastructure projects pick up post-festive season.
• Meanwhile, OPEC oil output rebounded in October as Libya resumed output, a Reuters survey found, although a further Iraqi effort to meet its cuts pledged to the wider OPEC+ alliance limited the gain.
• More oil could come from OPEC producer Iran as Tehran has approved a plan to increase output by 250,000 barrels per day, the oil ministry's news website Shana reported on Monday.
• In the U.S., a late season tropical storm predicted to intensify into a category 2 hurricane in the Gulf of Mexico this week could reduce oil production by about 4 million barrels, researchers said.

Petroleum News: Global Petroleum Market Updates

• On Sunday, OPEC+ announced a one-month delay to its planned production increase, a move aimed at stabilizing the market amidst weak demand signals and increasing non-OPEC oil supply. October saw a slight increase in OPEC production, primarily due to Libya’s resumed output, as noted in a recent Reuters survey. However, Iraq’s compliance with OPEC+ production cuts helped temper the overall output rise.
• Meanwhile, Iran has signaled intentions to boost production by an additional 250,000 barrels per day, which could add pressure to prices if implemented. In the U.S., a developing tropical storm in the Gulf of Mexico is expected to intensify, potentially curbing oil output by up to 4 million barrels—a temporary factor that could add short-term support to prices.

Expert Opinion on Petroleum Price Outlook

It is expected that Oil prices will be supported by Sunday's announcement from the Organization of the Petroleum Exporting Countries (OPEC) and their allies, a group known as OPEC+, to push back a production hike by a month from December as weak demand and rising non-OPEC supply depress markets.