Up Thin, Indonesia's Crude Oil Price In February Is 79.94 Dollars Per Barrel

Oil refinery illustration (Photo: Antara)

JAKARTA - The government recorded the price of Indonesian crude oil (ICP) in February 2023 of 79.48 US dollars per barrel, up slightly 0.94 dollars per barrel from 78.54 dollars per barrel in January 2023.

This determination is stated in the Decree of the Minister of Energy and Mineral Resources Number 101.K/MG.03/DJM/2023 concerning the Price of Indonesian Crude Oil in February 2023 which was signed on March 1, 2023.

"The average price of Indonesian crude oil for February 2023 is set at 79.48 US dollars per barrel," reads the fourth dictum of the Ministerial Decree, quoted on Friday, March 3.

Several factors that affect the decline in major crude prices in the international market include market concerns over global economic conditions, especially in European and US regions.

In addition, European Central Bank's 50bp interest rate increase plan to 3 percent in an effort to overcome inflation and reduce investor interest in the commodity market has also affected the average increase in the ICP.

Not only that, the increase in the US Dollar exchange rate due to expectations that the US Federal Reserve will raise interest rates, making crude oil commodities more expensive, so investors lower demand for crude oil commodities and switch to other investments.

Furthermore, the decline in the US unimployment rate in January 2023 to 3.4 percent (lowest since 1969) which has an impact on fears of a prolonged increase in interest rates by the Fed.

"Another factor, the US Department of Energy's plan to release 26 million barrels of oil from the Strategic Petroleum Reserve (SPR) adds to market concerns about oversupply of crude oil," the Indonesian Crude Oil Price Team quoted as saying.

Oil prices are also influenced by the world's crude oil supply, where based on the JCI report in February 2023, the projected global crude supply growth in 2023 rose by 0.9 million barrels per day to 2 million barrels per day when compared to the previous month's projections.

Based on the EIA Weekly Report (US Energy Information Administration), there was an increase in United States stock in February 2023 compared to the previous month. Raw oil rose by 26.3 million bbls to 479 million bbls, gasoline rose by 5.5 million bbls to 240.1 million bbls, distillate increased by 4.3 million bbls to 121.9 million bbls.

Another cause is the decline in refinery operational levels in January 2023. In the US region with an average of 86.4 percent, down 5.8 percent when compared to the refinery operational level in December 2022.

In the European region with an average of 79.1 percent, down 7.2 percent when compared to the refinery's operational level in December 2022.

However, there are factors that hold back the decline in crude oil prices in the Asia Pacific region, namely progress on China's reopening, which is a transition to the zero Covid policy, assessed by the market to increase demand for oil, especially fuel for transportation, and the economy that continues to improve in China, which is indicated by an increase in GDP projection by 5.2 percent in 2023.

"Saudi Arabia has raised prices for a number of crude oils sold to buyers in Asia, indicating confirmation of an increase in demand for Asian crude oil, especially China," quoted from exsum.

In addition, the increase in refinery operational levels in January 2023 in the Asian region (Japan, China, Singapore and South Korea) with an average of 92.2 percent increased by 2.7 percent when compared to the refinery operational level in December 2022.

The development of the average price of major crude oil in February 2023 is as complete as follows:

1. Brent dates fell by 0.29 US dollars per barrel from 82.78 US dollars per barrel to 82.49 US dollars per barrel.

2. WTI (Nymex) fell by 1.32 US dollars per barrel from 78.18 US dollars per barrel to 76.86 US dollars per barrel.

3. Brent (ICE) fell by 0.37 US dollars per barrel from $83.91 per barrel to $83.54 per barrel.

4. OPEC basketball rose by 0.95 US dollars per barrel from $81.62 per barrel to $81.88 per barrel.