Decreasing Global Oil Demand Pressures ICP Prices to 75.51 US Dollars per Barrel

JAKARTA - The Ministry of Energy and Mineral Resources (ESDM) has set the average price of Indonesian crude oil or Indonesian Crude Price (ICP) in December 2023 at 75.51 US dollars per barrel.

This figure was observed to have decreased by 4.12 US dollars per barrel from the previous month's 79.63 US dollars per barrel.

ICP December 2023 is determined through the Decree of the Minister of Energy and Mineral Resources Number 17.K/MG.03/DJM/2023 concerning Crude Oil Prices for December 2023 dated January 2, 2023.

Head of the Communications, Public Information Services and Cooperation Bureau (KLIK) of the Ministry of Energy and Mineral Resources, Agus Cahyono Adi, said that the decline in ICP was due, in part, to the decline in the price of primary crude oil on the global market due to a decline in global oil demand.

"The decline in global oil demand is influenced by weakening macroeconomic conditions due to high interest rates. Apart from that, there is also an increase in efficiency standards and an increase in electric cars which can limit oil demand," said Agus in Jakarta, Wednesday, January 10.

Apart from that, the decline in the price of primary crude oil on the international market was also due to an increase in oil production and stocks of distillate and gasoline in the United States.

Based on the EIA weekly report, United States (US) oil production increased at the end of December 2023 compared to the end of November 2023 by 100 thousand bpd to 13.3 million bpd.

Meanwhile, US Distillate and Gasoline stocks increased at the end of December 2023 compared to the end of November 2023, namely US gasoline stocks by 7.9 million bbl to 226.1 million bbl and US distillate stocks by 5 million bbl to 115.8 million bbl.

"Apart from that, the decline in prices was also due to negative market sentiment which was pessimistic about the compliance of OPEC+ countries in cutting production and the potential for other countries to follow in Angola's footsteps in leaving OPEC membership," added Agus.

The development of the average price of the main crude oil in December 2023 compared to November 2023 is as follows:

Dated Brent fell by 5.27 US dollars per barrel from 83.18 US dollars per barrel to 77.91 US dollars per barrel.

WTI (Nymex) fell by 5.26 US dollars per barrel from 77.38 US dollars per barrel to 72.12 US dollars per barrel.

Brent (ICE) fell by 4.71 US dollars per barrel from 82.03 US dollars per barrel to 77.32 US dollars per barrel.

The OPEC basket fell by 6.42 US dollars per barrel from 84.92 US dollars per barrel to 78.50 US dollars per barrel.

The average ICP for Indonesian crude oil fell by 4.12 US dollars per barrel from 79.63 US dollars per barrel to 75.51 US dollars per barrel.