The average price of Indonesian Crude Price (ICP) in October 2022 rose to US$ 89.10 per barrel compared to September which was only US$ 86.07 per barrel. This data was submitted by the Ministry of Energy and Mineral Resources (ESDM).
The determination of the average ICP for October 2022 is stated in the Decree of the Minister of Energy and Mineral Resources Number 151.K/MG.03/DJM/2022 concerning Indonesian Crude Oil Prices for October 2022 which was signed on November 1, 2022.
“The average price of Indonesian crude oil for October 2022 is set at US$89.10 per barrel,” reads the dictum of the four regulations.
Several factors influenced the increase in the main crude oil prices in international markets, including market concerns about the lack of global crude oil supply following the announcement by OPEC+ about the biggest supply reduction since the COVID-19 pandemic in 2020.
Moreover, the planned imposition of sanctions on Russian oil is expected to tighten supply towards the end of the year.
“In addition, US crude oil exports jumped to a record high of 5.1 million barrels per day, mainly towards Europe ahead of the imposition of sanctions on Russia’s crude oil trade. The increase in exports indicates resilience in global demand despite rising inflation and interest rates,” quoted from the Executive Summary of Indonesian Crude Oil Price Team.
The increase in world oil prices was also influenced by the weakening of the US Dollar exchange rate in line with increasing market expectations that the US Federal Reserve would reduce its aggressive stance on raising interest rates.
“IHS Markit reported in October 2022 that the projected growth in global oil demand was 100.5 million barrels per day, up 300 thousand barrels per day compared to the projection in the previous month,” said the Indonesian Oil Price Team.
Meanwhile, the US Energy Information Administration (EIA) released that US crude inventories fell by 3.1 million barrels during the week ended October 28. Bigger than analyst estimates at 1.6 million barrels.
West Texas Intermediate (WTI) crude futures for December delivery rose $1.63, or 1.8 percent, to $90 a barrel on the New York Mercantile Exchange.
Meanwhile, Brent crude futures for January delivery rose US$1.51, or 1.6 percent, to US$96.16 per barrel on the London ICE Futures Exchange.
Oil markets maintained their rally, even as stocks fell and the US dollar strengthened after Fed Chair Jerome Powell said it was too early to think about halting rate hikes.