December ICP Lifts 2019 Realized ICP to USD62.37 per Barrel

MINISTRY OF ENERGY AND MINERAL RESOURCES

REPUBLIC OF INDONESIA

PRESS RELEASE

NUMBER: 023.Pers/04/SJI/2020

Date: 9 January 2020

December ICP Lifts 2019 Realized ICP to USD62.37 per Barrel

The Indonesian Crude Price (ICP) of December 2019 calculated by the ICP formula is USD67.18 per barrel or growing by USD3.92 per barrel from USD63.26 per barrel in November 2019.

"Thus, the 2019 realized (average) ICP is USD62.37 per barrel," said Head of Bureau of Communication, Public Information Services, and Cooperation of Ministry of EMR, Agung Pribadi, in Jakarta, Thursday (9/1).

Agung also says the Indonesian Oil Price Team reported the ICP of SLC increased to USD67.61 per barrel or growing by USD3.97 per barrel from the previously USD63.64 per barrel.

Agung adds that OPEC member countries have agreed to lengthen production cut period and add production cut volume by 500,000 barrels per day, to 1.7 million barrels per day at the end of 2019, boosting the prices of the main crude on the international market during December 2019.

The world's oil prices are also uplifted by the market's positive response to the agreements achieved in the US-China trade talks phase 1, raising market expectation towards improvement in global economic growth and crude demands. The US Federal Reserve's policy to maintain the interest rate for reasons of economic prospect is also considered useful.

The market also gives a positive response to a weaker exchange rate of US Dollar against Euro and Poundsterling, driving investors to move their investment to the commodity market as well as increasing demands for crude oil during the winter and the end of year.

Another factor that boosts the world's oil prices is a report by the Energy Information Administration (EIA) on the reduced stock of US commercial crude in December 2019 by 5.7 million barrels to 441.4 million barrel compared to that of November 2019. This is due to increased oil processing by a number of US refineries at the end of the year because tax regulations encourage minimum oil stock.

For Asia Pacific, higher oil prices are affected by China's oil imports breaking the record because teapot refineries operate at maximum capacity to use up this year's import quota so that next year they can get quota addition. Moreover, crude demands grow very rapidly in China by 5.5% per year and in India by 5.1% per year, compared to growth in US which is only 0.5% per year in the last decade.

The maintenance of Japan's JERA Power Utility during the winter and higher market expectation of improvement in China's economic growth have also boosted crude price in the Asia Pacific region.

The complete development of the average price of the main crude on the international market in December 2019 compared to November 2019 is as follows:

Dated Brent grows by USD4.00 per barrel, from USD63.02 per barrel to USD67.02 per barrel.

WTI (Nymex) grows by USD2.73 per barrel, from USD57.07 per barrel to USD59.80 per barrel.

Basket OPEC grows by USD2.63 per barrel, from USD62.94 per barrel to USD65.58 per barrel.

Brent (ICE) grows by USD2.46 per barrel, from USD62.71 per barrel to USD65.17 per barrel. (IY)

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