Jakarta, CNBC Indonesia – The upward trend in crude oil prices has not stopped this week, when many commodity prices have fallen, including crude palm oil (CPO).
Launch data Refinitiv, throughout last week the price of CPO fell 6.5%, even in the last 5 weeks it fell more than 24%. Meanwhile, the price of West Texas Intermediate (WTI) crude oil rose 1.03% to US$ 71.64/barrel last week, and Brent type 1.13% to US$ 73.51/barrel. Both hit their highest levels since October 2018.
If you look at the last 5 weeks, WTI oil is up 9.6% while Brent is even higher, 12.5%.
Crude oil and CPO have a “close relationship”, because CPO can be processed into biodiesel fuel. So that CPO can be a substitute, and the price often trails crude oil.
High stocks in Indonesia and Malaysia as well as weak demand have made CPO prices fall erratically in the last 5 weeks. On the other hand, crude oil this week has actually benefited from the possibility of limited production in the United States (US).
This was revealed by a source from the Organization of the Petroleum Exporting Countries (OPEC).
“The crude market is rallying as OPEC is skeptical that a rise in US crude production will disrupt their plans to boost prices,” said Phil Flynn, senior analyst at Price Futures Group in Chicago. CNBC International, Friday (18/6/2021).
In addition, the projected increase in demand also supports crude oil prices. The US central bank (The Fed) when announcing monetary policy last Thursday raised its economic growth projection to 7% from the previous 6.5%.
If US economic growth increases, the demand for crude oil will also rise. At the same time, the Fed projects interest rates to rise in 2023, even 2 times to 0.75%. As a result of this projection, the US dollar rose sharply.
So far this week, the US dollar index rose 1.8% to 92.346, its strongest level since early April. The increase in the US dollar usually has a negative impact on the price of gold. But in fact the price of gold is still rising.
CNBC INDONESIA RESEARCH TEAM
(pap / pap)
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