Unexpected Drop in Crude Reserves Likely to Trigger Benzene Prices in US

USA- Benzene prices in the US market had showcased inclination throughout August due to increased demand from downstream sectors such as styrene, cumene, ethylbenzene, and acetone. The primary driver influencing the broader Benzene market dynamics is the upward trajectory of crude oil prices and constrained inventories within the US market. The rising demand had led to a tight number of crude oil inventories, which impacted the overall production cost of Benzene. As per data released by the US Strategic Petroleum Reserve (SPR), the limited availability of Benzene led to an overall rise in the production cost of Benzene within the domestic market. By the conclusion of the fourth week in August, Benzene prices were evaluated at USD 1173 per metric ton, FOB Louisiana.

Oil prices displayed minimal movement during Asian trading as market participants indicated a substantial reduction in US crude inventories. Additionally, attention remained fixed on the possibility of supply interruptions due to the impact of Hurricane Idalia. While the freight market displays initial indications of recovery, it encounters a new obstacle in the upcoming Hurricane Idalia. With forecasts predicting the storm's impact on the United States, experts within the freight sector are preparing for the possibility of a significant increase in market prices, which may consequently impact the overall selling prices of Benzene in the US market.

In the preceding session, the decline in the dollar's value significantly propelled oil prices upwards. This was in response to data that exhibited a moderation in both US consumer confidence and labor market conditions, factors that could lead to a more moderate stance from the Federal Reserve. Nonetheless, more substantial price increases were constrained by uncertainties relating to the ongoing increase in global oil supplies and the potential deterioration of demand conditions.

According to ChemAnalyst, Benzene prices are expected to continue to rise in the domestic market. This is due to the operational rate and increased production costs, which are likely to have a notable influence on the overall market conditions for Benzene. According to the officials, the automotive sales throughout the month remained similar to the previous month, showcasing the continuous demand for Benzene in the domestic market. Moreover, the upcoming elections have equally tempted the US Chemical industries to grab the opportunity and gain higher profits. Chemical manufacturers and distributors are currently dealing with a rise in regulatory measures encompassing a wide range of subjects, including firefighting foams and environmental justice. Furthermore, additional regulations might be introduced before the 2024 elections.