Influenced by market doubts, crude oil prices decline

Jakarta, IndonesiaHerald - The average price of Indonesian crude oil (ICP) in June 2024, decreased by USD0.47 compared to the previous month, from USD79.78 per barrel to USD79.31 per barrel.

This was conveyed by the Head of Bureau of Communication, Public Information Services and Cooperation (KLIK) the Ministry of Energy and Mineral Resources Cahyono Adi in Jakarta, Friday (5/7/2024).

As quoted from the Ministry of Energy and Mineral Resources' website, Saturday (6/7/2024), according to the analysis of the Indonesian Crude Oil Price Team, the decline in major international crude oil prices was influenced, among others, by market doubts about world crude oil demand. 

One indicator is the increase in crude oil stocks in the United States, which rose by 4.8 million barrels to 460.7 million barrels.

US gasoline stocks increased by 3.0 million bbl to 233.9 million bbl compared to the previous month.

According to Agus, another factor affecting the international market was profit-taking or selling of stocks that occurred when crude oil prices strengthened.

"The situation was triggered by concerns over oil supply disruptions due to geopolitical upheaval in Russia and the Middle East," Agus said.

Furthermore, market concerns also arose from US economic conditions. The US Central Bank delaying interest rate cuts strengthened the US Dollar exchange rate, which then made investors prefer to shift their investments from the commodity market to the US Dollar.

"In addition, there are market concerns about an increase in crude oil supply, as the results of the OPEC+ meeting in early June 2024, among others, agreed to start reducing production cuts at the beginning of Q4 2024," Agus said.

Data from the International Energy Agency (IEA) also showed that in June 2024, world oil supply increased by 520 thousand barrels per day, reaching a total of 102.5 million barrels per day.

However, the IEA also lowered the projected growth in world oil demand for 2024 by 100 thousand barrels per day, to 960 thousand barrels per day. (InfoPublik.id)