GP Petroleums and West Coast Oils Form Joint Venture to Enhance Bitumen Supply

Petroleum Price

• Oil eased on Friday after a rally the previous day, but prices remained set for a second consecutive weekly gain as investors weighed the impact of hurricane damage on U.S. demand against the potential for broad supply disruptions if Israel attacks Iranian oil sites.
• Brent crude oil futures fell by 29 cents, or 0.4%, to $79.11 a barrel by 0430 GMT. U.S. West Texas Intermediate crude futures dropped 21 cents, or 0.3%, to $75.64 per barrel. MCX crude oil prices opened at ₹6,364, reflecting a decline of 0.47%.

Petroleum Demand and Supply

• GP Petroleums Limited (GPPL) has announced a strategic partnership with West Coast Oils (WCO), based in Vadodara, Gujarat, to establish a joint venture focused on the specialty and general bitumen sector.
• This collaboration is aimed at expanding the market presence and enhancing supply capabilities in the manufacturing, processing, and distribution of specialty bitumen products.
• The joint venture will allow both companies to leverage their expertise and resources, facilitating a more robust supply chain to meet the growing demand for specialty bitumen products.
• With an equal contribution from both parties, the new entity will commence with an initial capital investment of ₹22 crores.
• This move underscores GPPL's commitment to strengthening its market position and ensuring a reliable supply of specialty bitumen products, which are increasingly in demand across various sectors.
• The partnership is expected to enhance GPPL's capabilities in manufacturing and distribution, ultimately contributing to a more competitive market landscape.

Petroleum News

• Crude oil prices surged by 4.49% to settle at ₹6,394, driven by a sharp increase in fuel demand as Hurricane Milton made landfall in Florida, disrupting gasoline supplies. About a quarter of fuel stations in the state ran out of gasoline, pushing up crude prices.
• Additionally, Middle East supply risks remain a focal point for the market. However, China’s National Development and Reform Commission's vague economic support measures disappointed investors, who expected more concrete steps to address the nation’s economic challenges, including the housing crisis and sluggish consumption. Goldman Sachs (NYSE ) noted a slight decrease in geopolitical risk premiums this week after significant increases in Brent implied volatility last week.
• In the U.S., crude oil inventories rose by 5.81 million barrels for the week ending October 4, 2024—the largest increase in over five months and far exceeding the market expectation of a 2 million-barrel rise.

Expert Opinion

Oil prices are likely to hover around the current 200-day average levels, with the primary concern being whether Israel will retaliate against Iranian oil facilities. - Global demand is now expected to grow by 1.2 million barrels per day (bpd) to 104.3 million bpd in 2025, about 300,000 bpd lower than previous forecasts.