World Oil Prices Drop, ICP Pegged 78.51 US Dollars Per Barrel

Crude Oil (Photo: Unsplash)

JAKARTA - The average price of Indonesian Crude Price (ICP) in August 2024 was set at 78.51 US dollars per barrel. The September ICP experienced a decline from the previous month's ICP of 82 US dollars per barrel.

This figure is determined through the Decree of the Minister of Energy and Mineral Resources Number 348.K/MG.03/DJM/2024 concerning the Price of Crude Oil in August 2024 dated September 2, 2024.

"This month's ICP has been set at 78.51 US dollars per barrel, down from the previous month of 82 US dollars per barrel. This decline is in line with the decline in major crude prices in the international market which is influenced by market concerns about a decline in market negative sentiment demand, also reinforced by easing political tensions in the Middle East," said Head of the KLIK Bureau. Ministry of Energy and Mineral Resources Agus Cahyono Adi, Friday, September 6.

Agus explained that the decline in oil prices also occurred due to the OPEC+ plan to continue to stop voluntary production reductions starting in October 2024, which means an increase in oil supply by the end of 2024.

In addition, the International Energy Agency (IEA) in its August 2024 report said the increase in world crude oil production by 230 thousand bph to 103.4 million bpd, as OPEC+ supplies gradually re-entered the market and increased non-OPEC+ supply.

"The IEA and OPEC are lowering the projected growth in demand for oil, especially for 2025, for most of the reasons caused by the economic slowdown and the weakening of Chinese oil consumption," said Agus.

Meanwhile, for the Asia Pacific region, the decline in crude oil prices, apart from being caused by these factors above, is also influenced by the slowdown in China's economic growth, which is indicated by the decline in the Purchasing Manager Index (PMI), both for the manufacturing and non-manufacturing sectors. As well as the decline in demand for oil and fuel in China due to increased use of electric vehicles and vehicles with liquefied natural gas fuel.

OPEC also revised a 0.1 percent decline in Japan's economic growth forecast in 2024 to 0.2 percent when compared to the previous month's publication due to the weak investment climate in Japan in Semester 1 of 2024.

The development of the average price of major crude oil in August 2024 compared to July 2024 has decreased to the following:

Brent' date fell by 4.40 US dollars per barrel from 85.31 US dollars per barrel to 80.91 US dollars per barrel.

WTI (Nymex) fell by 5.05 US dollars per barrel from 80.48 US dollars per barrel to 75.43 US dollars per barrel.

Brent (ICE) fell by 5.00 US dollars per barrel from $83.88 per barrel to $78.88 per barrel.

OPEC Basketball fell by 6.03 US dollars per barrel from 84.43 dollars per barrel to 78.40 dollars per barrel

On average, Indonesia's crude oil ICP fell by 3.49 dollars per barrel from 82.00 dollars per barrel to 78.51 US dollars per barrel.