Abundant Oil Production Presses Oil Prices, November ICP Set To 79.63 US Dollars Per Barrel

JAKARTA - The average price of Indonesian crude oil (Indonesian Crude Price/ICP) in November 2023 was set at 79.63 US dollars per barrel.

This figure has decreased by 7.09 dollars per barrel from the previous month which was set at 86.72 US dollars per barrel in October 2023.

Head of the Communication, Public Information and Cooperation Service (KLIK) Bureau of the Ministry of Energy and Mineral Resources Agus Cahyono Adi said that the decline in crude oil prices in the international market was influenced by the OPEC projection of an increase in crude oil production for 2023 by 0.3 million barrels per day compared to the previous month's report.

"The increase in production comes from Norway and the Organization for Economic Cooperation and Development (OECD) America," said Agus Cahyono, Saturday, December 9.

In addition, he said, the International Energy Agency (IEA) stated that global crude oil production in October 2023 increased by 320 thousand barrels per day to 102 million barrels per day, up from the previous month, which came from the United States and Brazil.

"OPEC estimates that global crude demand has decreased by 0.06 million barrels per day for the 3rd quarter of 2023, compared to estimates in the previous month's report," added Agus.

The slowdown in global economic growth to 2.9 percent from the previous estimate of 3 percent, mainly in Europe, is another factor that led to a decline in crude oil prices in November 2023. The European Central Bank is also still maintaining its benchmark interest rate for handling high inflation.

In addition, said AGus Cahyono, other production factors that affect crude oil prices include geopolitical tension conditions in the Middle East that have no impact on the supply and traffic of world crude oil trade.

Then, the decline in refinery margins in October, mainly in the types of cracking for gasoline, along with the decline in product prices in the market. The EIA reported that the United States' commercial Crude Oil stock increased by 10.6 million barrels at the end of November 2023 to 431.7 million barrels compared to the end of October 2023.

"Then the decline in global refinery Intake in October was 1.4 million barrels per day to an average of 80.1 million barrels per day compared to the previous month," continued Agus.

Agus added that another factor is the increase in US crude exports to 4.6 million barrels per day, which is the highest since March 2023.

For the Asia Pacific region, crude oil prices have fallen due to market concerns about Japan's slowdown in economic growth. Japan's gross domestic product fell to 2.1 percent annually in the third quarter of 2023, after a 4.8 percent increase in the second quarter.

"The decline in refinery intake in China, India and South Korea was caused by a decrease in the refinery margin for the middle distillate type," concluded Agus Cahyono.

The full development of the average price of major crude oil in November 2023 compared to October 2023 as follows: