Global Benzoic Acid Prices Likely to Increase in May 2023

The market for Benzoic Acid anticipates an upbeat economic situation for the entire month of May 2023. The main drivers of price change are upstream crude oil prices and feedstock toluene prices, which are also anticipated to have a favorable effect on the market situation for Benzoic Acid.

The sudden announcement of a concerted cut in oil output by OPEC+ members caused a dramatic rise in oil prices worldwide. This surprise cut supported the upward trajectory for Benzoic acid. In February 2023, Russian oil output was lowered by 500,000 barrels daily. With a minor increase in its costs in the Chinese market, this was advantageous for the market for Benzoic Acid. Saudi Arabia, Russia, and other significant upstream Crude Oil producers that are members of OPEC+ have previously announced further output restrictions. The operating range of oil prices has once again shifted upward due to the pattern of upstream Crude Oil supply surpassing demand; however, the OPEC production reduction plan is likely to reverse this structure. This has an impact on the worldwide downstream market scenario for Benzoic Acid. Crude Oil has remained in high demand across the world. Additionally, although oil prices are likely to fluctuate, downstream clients may be less tolerant of high oil prices.

In May, OPEC+ will put its production reduction plan into action, and it is anticipated that the supply of Crude Oil will decrease by around 1.15 million barrels per day. The U.S. Federal Reserve hiked interest rates by 25 basis points on May 4 as planned, after which the rate increase would halt. However, worries about the future of demand for Benzoic acid persisted in the market.

When the First Republic Bank of the United States declared bankruptcy on May 1, the financial crisis struck once more, sending the market into a frenzy. With the price of international Crude Oil falling and the market's attitude being fragile, there has recently been a significant macro risk aversion emotion. For Benzoic Acid, the fundamental support was insufficient. In terms of Crude Oil, it was reported on May 5 that Saudi Arabia had lowered Crude Oil futures prices in the Asian market.

In order to strike a balance between the supply and demand of Crude Oil, the Abu Dhabi National Oil Company of the United Arab Emirates said that it would cut crude oil exports by 5% starting in May, influencing the Benzoic Acid market. Additionally, investors' worries about the U.S. economic downturn had diminished. From that point forward, Benzoic Acid's fundamentals lacked support, and its performance remained subpar, which eventually had an impact on its upward trajectory.

As per the ChemAnalyst, It is projected that Benzoic Acid prices will rise as upstream Crude Oil prices are expected to demonstrate a positive trend throughout the second quarter of 2023.