January ICP Climbs to USD53.17 per Barrel after OPEC+ Cuts

MINISTRY OF ENERGY AND MINERAL RESOURCES

PRESS RELEASE

NUMBER: 048.Pers/04/SJI/2021

Date: 4 February 2021

January ICP Climbs to USD53.17 per Barrel after OPEC+ Cuts

Organization of the Petroleum Exporting Countries (OPEC)+ has agreed to make a production cut of 7.2 million barrels per day until March 2021. This is one of the factors that has lifted Indonesian Crude Price (ICP) of January 2021 to USD53.1 per barel.

Head of Bureau of Communication, Public Information Services, and Cooperation of Indonesian Ministry of Energy and Mineral Resources (EMR) Agung Pribadi said the price has raised by USD5.39 per barrel compared to December 2020 price of USD47.78 per barrel. "ICP dynamics are strongly influenced by global oil stock," he said in Jakarta on Thursday (4/2).

Decision on the ICP is set out in EMR Ministerial Decision Number 22.K/MG.03/MEM.M/2021 on Determination of Indonesian Crude Price of January 2021.

According to Agung, OPEC+ obedience level to the production cut deal in January 2021 reached 85% on average, higher that that of December 2020 of 75%. The deal is in line with Saudi Arabia's commitment to an additional voluntary cut of 1 million barrels in February and March 2021 as part of the OPEC+ Supply Agreement.

Meanwhile, the Indonesia Crude Price Team quoted a report by the IEA in January 2021 which states that US crude stock in January 2021 dropped by 16.8 million barrels to 476.7 million barrels.

The IEA has also estimated that the global oil demand in 2021 will go up by 5.5 million barrels per day to 96.6 million barrels per day. Meanwhile, OPEC has projected the global oil demand in 2021 to raise by 5.9 million barrels per day to 95.9 million barrels per day.

According to the Price Team, the Covid-19 vaccination program in a number of countries has also triggered the increase in global oil price besides market optimism for US President inauguration and the hope that President Joe Bidden's administration can give additional economic stimulus to improve US economy.

For the Asia-Pacific, the increase in crude price has also been influenced by less term supplies by Saudi Arabia to Asia in line with the decision to add voluntary production cuts and higher refinery margins especially for naphtha and fuel oil.

"Other factors include a higher demand for direct-burning oil by Japanese power plants because of cold weather and limited LNG supply as well as the increase in crude demand by China and South Korea which are hit by extreme winter," stated the Price Team.

Details of global oil prices development on the international market are as follows:

- Dated Brent is up by USD4.98 per barrel, from USD49.86 per barrel to USD54.84 per barrel.

- WTI (Nymex) is up by USD5.03 per barrel, from USD47.07 per barrel to USD52.10 per barrel.

- Basket OPEC is up by USD5.21 per barrel, from USD49.17 per barrel to USD54.38 per barrel.

- Brent (ICE) is up by USD5.10 per barrel, from USD50.22 per barrel to USD55.32 per barrel. (IY)

Head of Bureau of Communication, Public Information Services, and Cooperation

Agung Pribadi (08112213555)

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