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Indonesia Energy Ministry: Demand Rises, July ICP Rises to USD72.17 per Barrel


The Indonesian Crude Price (ICP) of Indonesian crude oil in July 2021 was set at USD72.17 per barrel or an increase of USD1.94 per barrel compared to June 2021 which recorded an ICP of USD70.23 per barrel.

The determination of this ICP is stated in the Decree of the Minister of Energy and Mineral Resources Number 138.K/HK.02/MEM.M/2021 concerning the Determination of Indonesian Crude Oil Prices for July 2021, which is based on the calculation of the ICP Formula.

Quoted from the Executive Summary of the Indonesian Crude Oil Price Team, ICP SLC July 2021 also increased by USD 1.83 per barrel from USD 70.82 per barrel to USD 72.65 per barrel.

Based on the report, several factors are said to have influenced the increase in the price of major crude oil in the international market, among others, related to oil demand. OPEC reported an upward revision of its estimated demand for the third quarter of 2021 by 60 thousand barrels per day to 98.19 million barrels per day in the OPEC publication in July 2021, compared to last month’s publication.

In addition, based on the publication of the Energy Information Administration (EIA), there is an increase in gasoline demand in the United States at the end of July 2021 compared to the end of June 2021, by 152 thousand barrels per day to 9.3 million barrels per day.

Other factors are related to oil supply/production and stock, namely:

a. OPEC lowered its projection for production levels of NON-OPEC countries in 2021 by 30 thousand barrels per day to 63.8 million barrels per day in OPEC’s publication in July 2021, compared to the previous month.

b. The EIA reports a decrease in US stockpiles at the end of July 2021 compared to the end of June 2021.

c. The IEA in its July 2021 report estimates that there will be a decline in world crude oil stocks in the third quarter of 2021, the largest in the last 10 years, namely commercial crude oil stocks by 16.7 million barrels to 435.6 million barrels and gasoline stocks by 7.4 million barrels to 234.2 million barrels.

The increase in world crude oil prices during July 2021 was also due to the improvement in the United States economy, which was marked by an estimated annual GDP growth of 7.4% in 2021, after falling 3.5% in 2020 (yoy).

In addition, there is an increase in world refinery throughput in June 2021 by 1.6 million barrels per day compared to May 2021, and is expected to increase in July and August 2021 with further additions of up to 2.7 million barrels per day.

Another factor is the increase in the world aviation index in July 2021 compared to the previous month, which currently has a trend towards the 50% level before the pandemic, especially triggered by countries in Europe and Asia.

For the Asia Pacific region, the increase in oil prices was also influenced by the real-time traffic index in several major Asian countries such as China, Taiwan, Singapore and Malaysia, which increased in July 2021 compared to the previous month. Japan’s largest refineries Eneos in Kashima with a CDU capacity of 168 thousand barrels per day and Sendai with a CDU capacity of 145,000 barrels per day, will resume operations at the end of July 2021.

The complete development of the main crude oil prices on the international market in July 2021 compared to June 2021 is as follows:

– Dated Brent rose by USD 1.99 per barrel from USD 73.04 per barrel to USD 75.03 per barrel.

– WTI (Nymex) rose by USD1.08 per barrel from USD71.35 per barrel to USD72.43 per barrel.

– The OPEC basket rose by USD1.64 per barrel from USD71.81 per barrel to USD73.46 per barrel.

– Brent (ICE) rose by USD 0.89 per barrel from USD 73.41 per barrel to USD 74.29 per barrel. (TW/KO)

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