Down 10.84 US Dollars, Indonesia's Regional Oil Price As Of December 2022 Is 76.66 US Dollars Per Barrel

Illustration. (Photo: Doc. Antara)

JAKARTA - The Ministry of Energy and Mineral Resources (ESDM) set the average Indonesian crude price (ICP) in December 2022 at 76.66 US dollars per barrel. This amount decreased by 10.84 US dollars from the ICP price as of November 2022 of 87.5 US dollars per barrel.

This reads the Minister of Energy and Mineral Resources Decree No. 2.K/MG.03/DJM/2023 concerning the PRIME Minister of Indonesia's Oil Prices in December 2022, quoted on Tuesday, January 3.

Quoted from the Executive Summary of the Indonesian Oil Price Team, several factors that have influenced the decline in major crude prices in the international market, including market concerns over global economic conditions. Especially over the US Federal Reserve plan to continue its policy of increasing interest rates to tackle inflation.

In addition, the European Central Bank also decided to increase interest rates in mid-December 2022.

The decline in oil prices is also related to the world's crude oil supply, OPEC+, which maintains a quota of crude oil production cuts due to uncertainty in crude supplies from Russia. This is beyond market expectations that expect an increase in production cuts from OPEC+.

Furthermore, oil prices were also determined based on the International Energy Agency (IEA) report in December 2022. Non-OPEC crude supplies rose by 420 thousand barrels per day in the fourth quarter of 2022 compared to the previous quarter.

Regarding the world's demand for crude oil, the Ministry of Energy and Mineral Resources wrote, based on an OPEC report in December 2022, there was a revised decline in world crude demand projections for 2022 to 99.56 million barrels per day compared to projections in the previous month.

Then, IHS Markit in the December 2022 report said the world crude demand fell by 600 thousand barrels per day to 99.8 million barrels per day compared to the previous month.

In addition, based on the US Weekly Report on Energy Information Administration (EIA), there was an increase in stock, especially the stock of US oil products in December 2022. Gasoline rose by 9.2 million barrels to 223.0 million barrels, compared to the previous month.

Meanwhile, Distillate rose by 7.6 million barrels to 120.2 million barrels, compared to the previous month.

"Another factor is the strengthening of the US dollar exchange rate compared to other currencies, especially against the euro," the Exsum said.

For the Asia Pacific region, the decline in crude oil prices was also influenced by the increase in the number of new COVID-19 cases in China after the easing of the restriction policy was implemented. This raises market concerns about the decline in demand for crude oil from the country.

The following is the development of the average price of major crude oil in December 2022 compared to November 2022:

Brent's date fell by 10.55 dollars per barrel from 91.67 dollars per barrel to 81.12 dollars per barrel.

WTI (Nymex) fell by 7.87 US dollars per barrel from 84.39 US dollars per barrel to 76.52 US dollars per barrel.

Brent (ICE) fell by 9.51 US dollars per barrel from 90.85 US dollars per barrel to 81.34 US dollars per barrel.

OPEC basketball fell by 10.55 US dollars per barrel from 89.73 US dollars per barrel to 79.18 US dollars per barrel.