Tight Crude Oil Supply to Escalate Global Benzene Prices
- 28-Jun-2022 4:48 PM
- Journalist: Rene Swann
The global market has been witnessing an uptrend in the local Benzene prices. The back-to-back sanctions by the US government resulted in supply disruptions. Moreover, Libya's halt in the export and production of Crude has been adding fuel to the current situation. In addition, the high requirement for Benzene in the global market also laid the foundation for the price hike.
Oil prices have been rebounding in the US market after the government imposed new sanctions on Iran. The sanctions have brought about supply concerns in the domestic market, recovering the upstream crude price to rise. Hence, Benzene is the derivative of the Crude, and the inflicting upstream crude price trend further influences the Benzene price to move in an uptrend. In addition, the imposition of high interest by the federal reserve ushered in the rise of trading costs affecting the retail customers. Therefore, the Benzene price in the US market has risen by approximately $20 / tonne with an increment of 1% on 17th June.
In Libya, due to the increasing political crisis, the oil plants have been shut down along with the implementation of force majeure, halting the shipments within 72 hours. Thus, the previously mentioned situation also tightened supply activities, further triggering the global crude price to move upward. However, the constrained trade of the upstream Crude affected the production of Benzene. As a result, the limited availability of Benzene and its increasing requirement in the global market cause the Benzene pricing to remain high.
The bullish demand for Benzene from the end-use automotive, construction, and chemical sectors to produce downstream rubber, plastics, and pesticides has been pushing the Benzene market. Besides the high use of Benzene's derivatives cumene, phenol, acetone, and several other chemicals, the global market also encouraged the growth of Benzene values. The healthy buying sentiments in the international market are positively impacting the Benzene pricing.
According to ChemAnalyst, "Benzene price is expected to skyrocket in the forthcoming weeks due to surge in upstream crude prices. The sanctions might increase supply concerns, which is likely to affect the Benzene production. Also, the expected rise in global demand could further trigger the Benzene pricing."