Abundant in Supply, The Price of Indonesian Crude Oil is Declining

KATADATA ? The average price for Indonesian crude oil on June 2015 reached US$59.40 per barrel. If compared to the price of the ICP on May 2015, which was at US$ 61.86 per barrel, it seems to depreciate on June 2015 by US$ 2.46 per barrel or 3.97%. This number is based on the formula price from the Indonesia Crude Price (ICP). The decline of ICP on June 2015 ends the trend of the price increase since last April.

Additionally, the Sumatran Light Crude only reached US$ 59.54 per barrel, which means it depreciate by US$ 3.16 per barrel from US$ 62.70 per barrel in the previous month. However, the price of the Light Sweet Crude Oil (WTI) is not affected due to the summer driving season in the U.S.

The decline of price of the Indonesian crude oil is hand to hand with the condition of the main crude oil in the international market due to the abundance of supply. There are several factors. First, according to the publication of OPEC (Organization of the Petrloeum Exporting Countries) on June 2015, the supply of OPEC crude oil on May 2015 had increased by 0.023 million barrel per day to become 30.972 million barrel per day compared to the previous month.

Second, according to the EIA (Energy Information Administration) report in the USA, the level of supply for gasoline and distillate fuel oil in U.S. for the whole June 2015 has increased. The supply of gasoline went up by 1.1 million barrel to become 218.5 million barrel, while the distillate fuel oil went up by 1.9 million barrel to become 135.4 million barrel.

Third, the increase in exporting Iranian crude oil in June 2015 had reached 3.20 million barrel per day due to the possibility of economic sanction removal regarding the Iranian nuclear agreement, the possibility of a failed debt payment by Greece to the IMF, and also the new condensate export policy by the U.S. government.

For the Asia Pacific region, the decline in the crude oil?s price is also affected by the slow growth of China?s economy, which was at 7 percent in the first quarter of 2015. This is the lowest growth rate since 2009. ?Other than that, the decrease in sales of vehicles in China along with the import of China?s crude oil has reached 10 percent on May 2015,? said the Indonesian Crude Price Team, Friday (3/7).

Here are the detailed data regarding the development of international crude price:

- The Light Sweet Crude Oil (WTI/Nymex) increases up to US$ 0.43 per barrel from US$59.40 to become US$59.83 per barrel.

- Brent (ICE) decreases by US$ 1.86 per barrel from US$ 65.61 to become US$ 63.75 per barrel.

- Basket OPEC decreases by US$ 1.88 per barrel from US$ 62.16 per barrel to become US$ 60.28 per barrel.