OPEC+ Production Quota Not Fulfilled, Indonesian Crude Oil Prices In June Rise 8.01 US Dollars

Photo: Doc. Between

JAKARTA - The Ministry of Energy and Mineral Resources (ESDM) reported that the average Indonesian Crude Price (ICP) during June 2022 rose 8.01 US dollars per barrel. That way, the ICP price in this period will be 117.62 US dollars per barrel from the previous 109.61 US dollars per barrel as of May 2022.

The determination of the ICP price is stated in the Decree of the Minister of Energy and Mineral Resources No. 75.K/MG.03/DJM/2022 concerning Indonesian Crude Oil Prices for June 2022, 1 July 2022.

As quoted from the Executive Summary of the Indonesian Crude Oil Price Team, there are several factors that influence the increase in the price of major crude oil in the international market. Among other things, the concerns of oil market players due to uncertainty in world crude oil supply.

This is due to the inability of OPEC+ to meet the production quota target, which is a combination of a lack of investment, the imposition of sanctions on Russia, a decrease in the production of Libya, Ecuador and Nigeria, and the production of the UAE and Saudi Arabia which is based on production quotas that are close to maximum production capacity.

"In addition, US shale oil production did not show a significant increase in production," the report was quoted as saying.

Another factor is related to world crude oil supply where OPEC in its June 2022 report reduced the world's crude oil supply surplus by 400 thousand bopd to 1 million bopd.

Regarding world crude oil demand, namely the increase in demand for European crude oil in line with the decline in natural gas supply, and the demand for fuel and jet fuel has increased entering the peak of the summer driving season in the US and Europe.

The increase in world oil prices was also influenced by high refinery margins, providing a definite incentive for refineries to maximize production levels.

For the Asia Pacific region, besides being caused by these factors, the increase in crude oil prices was also influenced by the Chinese Government's policy to loosen the pandemic policy by reducing the isolation period for immigrants and allowing the re-operation of independent refineries.

"Another factor is the increase in demand for fuel and jet fuel along with increasing economic activity and the easing of travel restrictions in India," as quoted from the exsum.

The complete development of the average price of main crude oil in June 2022 compared to May 2022 is as follows:

Dated Brent rose by 10.45 US dollars per barrel from 113.25 US dollars per barrel to 123.70 US dollars per barrel. WTI (Nymex) rose 5.08 US dollars per barrel from 109.26 US dollars per barrel to 114.34 US dollars per barrel. Brent (ICE) rose by 5.54 US dollars per barrel from 111.96 US dollars per barrel to 117.50 US dollars per barrel. OPEC basketball rose 3.96 US dollars per barrel from 113.87 US dollars per barrel to 117.83 US dollars per barrel (up to 29 June 2022).