Indonesia's Crude Oil Price In June 2023 Drops To 69.36 US Dollars Per Barrel

Illustration (Photo: Doc. Antara)

JAKARTA - The Ministry of Energy and Mineral Resources (ESDM) set the price of Indonesian crude oil or Indonesia Crude Price (ICP) in June 2023 at 69.36 US dollars per barrel.

This price was observed to have decreased by US$0.76 from May which was pegged at US$70.12.

Head of the Communication Bureau of the Ministry of Energy and Mineral Resources, Agung Pribadi, explained that the decline in the prices of major crude oil in the international market was influenced, among other things, by market concerns over the global economy, especially in the European and US Regions.

The determination of the ICP in June 2023 amounting to 69.36 US dollars per barrel, is stated in the Decree of the Minister of Energy and Mineral Resources Number 241.K/MG.03/DJM/2023 concerning the Price of Crude Oil in June 2023 dated July 3, 2023.

"The Indonesian Crude Oil Price Team in the Executive Summary said that the average price of major crude oil in June 2023 decreased compared to May 2023," he said in a written statement quoted on Saturday, June 8.

He explained that several factors that affect the decline in major crude prices in the international market include market concerns over global economic conditions, especially in the European and US regions.

Furthermore, he explained, the market's concern was due to the decline in the US Purchasing Managers Index (PMI) to 46.3 in early June 2023.

This is the lowest level in the last six months.

Meanwhile, the European composite PMI dropped to its lowest level in five months at 50.3 in early June 2023.

Then the Bank of England announced a major interest rate increase of 0.5 percent to 5 percent, followed by The European Central Bank and central banks in Switzerland and Norway also decided to raise the main interest rate.

This triggers the liquidation of funds and energy producers moving to hedging mentality. The US FOMC potential has again increased the Fed Rate, in connection with the efforts of the US Central Bank in the last 1 year through an increase in the Fed Rate by 5 percent to reduce inflation to 2 percent.

"Based on the EIA Weekly Report (US Energy Information Administration), there was an increase in United States stock in June 2023 compared to the previous month, namely Gasoline increased by 5.9 million bbls to 222.0 million bbls, and Distillate increased by 7.7 million bbls to 114.4 million bbls," continued the Price Team in the exsum.

Another factor that caused the decline in crude oil prices in June 2023 was the IEA said the increase in global crude stockpiles by 10 million bbls in connection with the increase in crude stockpiles from the OECD state by 27 million bbls.