The average crude price in September was noted in the Energy and Mineral Resources Minister’s Decree No. 40.K/MG.03/DJM/2022 concerning the Indonesian crude price for September 2022, the Energy and Mineral Resources Ministry said in a press statement released in Jakarta on Tuesday.
In its executive summary, the Indonesian crude price team noted several factors that caused the decline in crude prices in the global market.
The first factor was related to the global condition, with the US Federal Reserve Board raising the Fed rate by 0.75 percent to ease inflation. The move led to a decline in economic activities and crude demand.
The second factor concerned market players’ concerns over a potential global recession as a result of the monetary policies of big countries, such as Britain, Switzerland, and Norway, to raise interest rates following the Fed rate hike.
The other factors were related to global crude demand. In its September report, the International Energy Agency (IEA) projected that global crude demand will reach 2 million barrels of oil per day (bopd), down 100 thousand bopd compared to the projection a month earlier.
The end of the summer driving season also reduced fuel consumption in the US.
The third factor was related to an increase in global crude supplies to 101.3 million bopd in September from 790 thousand bopd the month before.
“This is the highest point in the wake of (the COVID-19) pandemic due to increasing production in Libya, the United Arab Emirates, and Saudi Arabia, among others,” according to an IEA report released in September.
Meanwhile, the IHS Markit report for September predicted that US crude supplies will increase 600 thousand bopd in the fourth quarter of 2022 and 1.1 million bopd next year.
OPEC’s policy to cut production by 100 thousand bopd has had no significant impact on the balance between global supply and demand.
Russia’s crude exports rose to 220 thousand bopd to reach 7.6 million bopd in August.
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