Global Economic Activities Slowly Recover, May ICP is Set at USD65.49 per Barrel

MINISTRY OF ENERGY AND MINERAL RESOURCES

REPUBLIC OF INDONESIA

PRESS RELEASE

NUMBER: 193.Pers/04/SJI/2021

Date: 8 June 2021

Global Economic Activities Slowly Recover, May ICP is Set at USD65.49 per Barrel

The recovery in global economic activities and high demand for crude oil have pushed the Indonesian Crude Price (ICP) up by USD3.53 per barrel to USD65.49 per barrel in May 2021 compared to the April ICP of USD64.69 per barrel.

Head of Bureau of Communication, Public Information Services, and Cooperation of the Indonesian Ministry of Energy and Mineral Resources (EMR), Agung Pribadi, said the easing of activity in the United States, China, and parts of Europe has also affected the world's oil demand. "The Indonesian Oil Price Team reported that the economic growth is a positive impact of accelerated vaccination program, so prices are now in line with the global supply and demand of oil," Agung said in Jakarta on Tuesday (8/6).

Agung went on to say that the May 2021 report of the Organization of Petroleum Exporting Countries (OPEC) shows the United States' high demand for oil in 2021 of 5.95 million barrels of oil per day (6.6%) compared to year to year (y-t-y) demand in 2020. This condition is in line with the country's plan to cancel the lifting of sanctions on Iran, so there is a potential for cancelling Iran's crude oil exports.

Another factor that has lifted the world's oil prices is the compliance level of OPEC+ members on production cut quotas which reached 113%.

In the same month, the United States' Energy Information Administration (EIA) estimated that the US crude oil production in 2021 would fall by 290,000 bopd to 11.02 million bopd. In terms of weekly stockpiles, the EIA reported that the US crude oil stocks dropped by 800,000 barrels to 484.3 million barrels, gasoline stocks fell by 3.3 million barrels to 232.5 million barrels, and distillate stocks lowered by 7.1 million barrels to 129.1 million barrels.

The Indonesian Oil Price Team informed that stronger equity market and weaker US Dollar exchange rate against a number of currencies--the lowest in the last four months--had made investors switch to investing in commodities, including crude oil.

For the Asia Pacific region, higher crude oil prices were also affected by rising oil demand from China towards the end of the maintenance period, solid demand for oil from Japan, and India's oil demand which remained strong, especially from the country's refineries, despite skyrocketing Covid-19 cases.

The development of the average price of major crude oil on the international market in May 2021 compared to April 2021 is as follows:

- Dated Brent rose by USD4.05 per barrel, from USD64.70 per barrel to USD68.75 per barrel.

- WTI (Nymex) grew by USD3.45 per barrel, from USD61.70 per barrel to USD65.16 per barrel.

- Basket OPEC climbed by USD3.59 per barrel, from USD63.24 per barrel to USD66.83 per barrel.

- Brent (ICE) went up by USD2.98 per barrel, from USD65.33 per barrel to USD68.31 per barrel. (IY)

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

Agung Pribadi (08112213555)

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