Unaffected By Middle East Conflict, RI's Crude Oil Price Drops To 86.72 US Dollars Per Barrel

Oil refinery illustration (Photo: dock. Antara)

JAKARTA - The government through the Ministry of Energy and Mineral Resources (ESDM) has set a new price for Indonesian crude oil or the Indonesia Crude Price.

The average Indonesian crude oil in October 2023 compared to September 2023 decreased by USD 3.45 per barrel from USD 90.17 per barrel to USD 86.72 per barrel.

"Factors that affect the decline in major crude prices in the international market include concerns that the market will be under pressure from global economic growth, and a decrease in demand for oil, if interest rates remain at a high level," said the Indonesian Crude Oil Price Team at the Executive Summary quoted Friday, November 10.

Another factor that caused a decline in crude oil prices in October 2023 was due to the profit-taking of market participants in anticipation of the results of the US Federal Reserve meeting and data on China's Purchasing Manager s Index.

The Crude Oil Price Team also explained that increasing geopolitical tensions in the Middle East region did not affect crude oil traffic in the region, and diplomatic efforts succeeded in preventing the spread of conflict to other regions.

Regarding global demand for oil, OPEC estimates that there will be a decline in world oil demand projections in Q4 2023 by 50 thousand barrels per day to 103.13 million barrels per day compared to previous month's projections. Meanwhile, S&P Global estimates a decline in world oil demand projections in 2023 by 90 thousand bph to 102.30 million bpd compared to previous month's projections. As for global oil production, OPEC also estimates there will be an increase in projected production of OPEC and Non OPEC crude oils for 2023 compared to previous month's projections. The increase is mainly on US crude oil production, Latin America, Nigeria and Saudi Arabia.

The IEA said the increase in global crude oil production in September 2023 was 270 thousand bpd to 101.6 million bpd compared to previous month's production, mainly production from Nigeria and Kazakhstan.

"In addition, the decline in crude oil prices was also triggered by a 0.1 percent decrease in the European region's economic pace in 2023 compared to the previous month's projection to 0.5 percent due to the decline in the European industrial sector and the impact of monetary policy measures by the European Central Bank to control inflation rates," said Tim Harga.

The EIA said the United States commercial Crude Oil stock increased 7 million barrels by the end of October 2023 to 421.1 million barrels compared to the end of September 2023, continued the Price Team.

Intake refineries globally at the end of September 2023 fell 1.3 million bpd to 81.1 million bpd when compared to the refinery intake in August 2023, due to the end of the summer driving season, entering an extreme weather change period (hurricane season) and refineries entering maintenance.

"The increase in Russian oil exports in September 2023 by 460 thousand bpd (mom) or to 7.6 million bpd is also a factor that affects the decline in world crude oil prices," concluded the Price Team.

For the Asia Pacific region, the decline in crude oil prices in addition to being caused by these factors above is also influenced by a decrease in demand for fuel in China for September 2023 by 7.8 percent compared to the previous month to 522 thousand bpd. As well as the return of Russian oil gas exports to the market (including Asia), after the elimination of the policy of banning oil gas exports by the Russian government.

The full development of the main raw price in October 2023 compared to September 2023 as follows:

Brent' date fell by 2.95 US dollars from 94.00 US dollars per Barrel to 91.05 US dollars per barrel.

WTI (Nymex) fell by 3.96 US dollars from 89.43 US dollars per barrel to 85.47 US dollars per Barrel.

Brent (ICE) fell by 3.89 US dollars per barrel from 92.59 US dollars per barrel to 88.70 US dollars per barrel.

OPEC basketball fell by 2.84 US dollars from 94.70 US dollars per barrel to 91.86 US dollars per barrel.

On average, Indonesia's crude oil ICP fell by USD 3.45 from USD 90.17 to USD 86.72 per barrel.