World bitumen prices
World bitumen prices have been always among the top news of the days. In the following, we discuss the items that affect the prices.
The most important item is the Crude oil price and production. Crude oil is the main
input of refineries in the production of petroleum products and bitumen.
Therefore, crude oil price changes have a great effect on the bitumen prices and petrochemical costs.
To put it differently, there is a close connection between the crude oil and
the petroleum products market and the world bitumen prices. Economically speaking, the interaction
between changes in crude oil prices and the world bitumen prices depends on the crude oil production.
Now, we need to know what items have the power to change the crude oil price.
Brent refers to oil produced at some oil fields in the North Sea in northern Europe and is used
as an international basis for oil and bitumen prices.
West Texas Intermediate (WTI) is a kind of light crude oil produced in the United States.
As a matter of fact, crude oil prices depend on three main agents: supply, demand, and geopolitical issues.
Supply
The quantity of available oil determines the supply volume. Supply is usually set by OPEC member countries.
However, in recent years, the United States has become more prominent in this regard.
So if the important producing countries produce a high amount of crude oil, the supply will go up.
In 2014, for example, Saudi Arabia decided not to cut production and continued to produce at a high level.
As can be seen, the supply amount of crude oil is one of the items that affect the bitumen prices.
Demand
Demand is another factor affecting the bitumen prices. It depends on the quantity of needed crude oil.
Crude oil also has often the case for heating, electricity, and transportation.
The more economically developed a region is, the more demand there will be for crude oil.
So, the demand of the market is another factor which affects the world bitumen prices.
Geopolitical issues
As supply is determined by major oil-producing countries, tensions in one of these countries will cause major problems.
So if there is a war or a conflict in an oil-producing region, oil reserves may be threatened, and that will affect the world bitumen prices.
Geopolitical issues have always been a determinative factor in oil prices, especially when the situation in the Middle East or other oil-rich regions is inflamed. Fortunately, Middle Eastern countries produce a high volume of oil, and if there is instability in the region, no one is sure what will happen to supply.