Increases Slightly, Indonesian Crude Oil Price Becomes 78.54 US Dollars per Barrel

Raw oil (Photo: Doc. Antara)

JAKARTA - The Ministry of Energy and Mineral Resources (ESDM) noted that the average price of Indonesian crude oil or ICP for January 2023 based on the calculation of the ICP Formula was set at USD 78.54 per barrel, a slight increase of USD 1.88 per barrel compared to the previous month which reached 76.66 US dollars per barrel.

The determination of the average ICP for January 2023 is stated in the Decree of the Minister of Energy and Mineral Resources Number 47.K/MG.03/DJM/2023 concerning Indonesian Crude Oil Prices for January 2023 which was stipulated on February 2, 2023.

As quoted from the Executive Summary of the Indonesian Crude Oil Price Team, the increase in the price of the main crude oil in the international market was influenced by several factors, including market optimism that there would be an increase in demand for crude oil and crude oil products from China after the lifting of the activity restriction policy in that country.

In addition, based on the January 2023 International Energy Agency (IEA) report, growth in crude oil supply in 2023 is expected to slow down to 1 million barrels per day compared to growth in 2022 which reached 4.7 million barrels per day.

Russian exports in December 2022 decreased by 200 thousand barrels per day to 7.8 million barrels per day after the embargo policy and price restrictions on Russian crude oil took effect.

Meanwhile, regarding world crude oil demand, based on the IEA report for January 2023, world crude oil demand in 2023 is projected to increase by 1.9 million barrels per day to 101.7 million barrels per day.

Meanwhile, based on the OPEC report for January 2023, the projected world demand for crude oil in the 2023 quarter will increase by 0.16 million barrels per day to 101.04 million barrels per day compared to the projection in the previous month.

In its January 2023 report, IHS Markit projects world crude oil demand growth for 2023 to increase by 0.8 million barrels per day to 2.5 million barrels per day compared to the previous month's projection.

Another factor, based on the EIA (U.S. Energy Information Administration) Weekly Report, was a decline in stocks, especially stocks of United States oil products in January 2023, namely Distillate stocks fell by 3.5 million barrels to 115.3 million barrels, compared to the previous month.

"In addition, the improvement in the US economy is indicated by the average GDP growth for the October 2022 - January 2023 period of 2.9% and the US weekly unemployment rate in January 2023 is lower than projected," the exsum was quoted as saying.

The increase in oil prices was also due to the International Monetary Fund (IMF) report for January 2023, the projected economic growth for 2023 rose 0.2 percent compared to the previous projection to 2.9 percent.

Meanwhile, for the Asia Pacific region, the increase in crude oil prices was not only due to these factors, but was also influenced by the continued increase in demand for crude oil products such as gasoline, kerosene, and diesel in India as well as increasing refinery utilities in Singapore and Taiwan.

The complete development of the average main crude oil price in January 2023 is as follows:

Dated Brent rose by 1.66 dollars per barrel from 81.12 dollars per barrel to 82.78 dollars per barrel.

WTI (Nymex) rose by 1.66 US dollars per barrel from 76.52 US dollars per barrel to 78.18 US dollars per barrel.

Brent (ICE) rose by 2.57 US dollars per barrel from 81.34 US dollars per barrel to 83.91 US dollars per barrel.

Basket OPEC rose by 1.92 US dollars per barrel from 79.68 US dollars per barrel to 81.60 US dollars per barrel.