Down, Indonesia's Crude Oil Price In May 2024 Is 79.78 US Dollars Per Barrel

JAKARTA - The Ministry of Energy and Mineral Resources (ESDM) has set the Average Price of Crude Price (ICP) for May of 79.78 US dollars per barrel.

The determination was made through the Decree of the Minister of Energy and Mineral Resources Number 261.K/MG.03/DJM/2024 concerning the Price of Crude Oil in May 2024 dated June 3, 2024.

The ICP in May fell from the April ICP of USD 87.61 per barrel.

According to the Head of the Communication, Public Information and Cooperation Service (KLIK) Bureau of the Ministry of Energy and Mineral Resources Agus Cahyono Adi, the decline in major crude prices in the international market was influenced, among others, by the reduced Premium Risk over geopolitical factors, along with the fading of concerns about the wider conflict in the Middle East and the uninterrupted supply of global crude oil.

"In addition, several other factors are high interest rates and inflation that suppress consumer and industrial demand, especially in Europe, when supply increases from non-OPEC producers like the United States. In addition, OPEC revised a decline in projected world oil increase in the second quarter of 2024 in May 2024 in its previous May 2024 publication compared to the previous month for the second quarter of 2024 of 0.08 million barrels per day, to 103.75 million barrels per day," Agus said in Jakarta, Tuesday, June 4.

Another factor that led to the decline in the May 2024 interest oil price was due to the uncertainty of the United States economy, which was triggered by delays in reducing the United States' central interest rate to reduce inflation.

Agus said this raised fears the market would hamper the economic growth of the United States, and could potentially reduce the demand for US crude oil.

"There are also concerns that the market will have a supply-demand balance following the US Department of Energy's plan to issue 10 million barrels of gasoil reserves in the summer, which also affects the decline in crude oil prices. Strengthening the US dollar exchange rate, other currencies have also led to a decline in prices," Agus added.

For the Asia Pacific region, the decline in crude oil prices in addition to being caused by these factors is also influenced by the reduced volume of crude oil processed by a number of refineries in Asia. Along with the decline in diesel sales margins due to an increase in product supplies from new refineries and cool weather in the northern hemisphere.

In addition, South Korea's crude oil throughput decline was due to a fire at the Daesan refinery of 3.6 percent and a decline in Singapore's crude oil throughput due to maintenance activities at ExxonMobil's refineries by 7.3 percent, when compared to the end of the previous month.

Then, there was a decrease in gasoil consumption in China during April 2024 by 4.41 percent to 16.51 million tons compared to the previous month, in line with the increase in the use of electric vehicles.

In full, the development of the main crude oil price in May 2024 compared to April 2024 is as follows:

Brent' date fell by 8.10 US dollars from 90.15 US dollars per barrel to 82.05 US dollars per barrel.

WTI (Nymex) fell by 5.77 US dollars from 84.39 US dollars per barrel to 78.62 US dollars per barrel.

Brent (ICE) fell by 6.00 US dollars per barrel from 89.00 US dollars per barrel to 83.00 US dollars per barrel.

OPEC basketball fell by 5.46 US dollars from 89.12 US dollars per barrel to 83.66 US dollars per barrel.

On average, Indonesia's crude oil ICP fell by USD 7.83 from USD 87.61 per barrel to USD 79.78 per barrel.