Research Team, CNBC Indonesia
Market
Sunday, 03/09/2023 20:10 WIB
Pictured: Oil pipeline operator Transneft’s oil tank at the Kozmino crude oil terminal on the coast of Nakhodka Bay near the port city of Nakhodka, Russia. (REUTERS/Tatiana Meel)
Jakarta, CNBC Indonesia – The price of world crude oil, Brent and West Texas Intermediate (WTI) hit an all-time high in 2023.
The price of Brent crude oil reached US$88.55 per barrel and WTI US$85.55 per barrel. Within a week the price of both rose 4.82% and 7.17%.
World crude oil prices have strengthened on expectations that cuts by the OPEC+ group of oil producing countries, led by Saudi Arabia, will continue until the end of 2023.
Analysts expect Saudi Arabia to extend its voluntary oil output cuts of 1 million bpd through next October, adding to cuts made by the Organization of the Petroleum Exporting Countries and allies, also known as OPEC+.
“With Brent prices stalled in the mid-US$80s, the prospects for Saudi Arabian crude returning to the market any time soon look slim and the impact is increasingly being felt around the world as commercial stock levels of crude oil and fuel products continue to fall,” said Ole Hansen. , analysts Saxo Bank.
In addition, the latest government data showed US crude production rose 1.6% in June to 12.844 million barrels per day, which was the highest level since February 2020, before the COVID-19 pandemic crushed demand for fuel and other oil products.
Meanwhile, US crude oil inventories (USOILC=ECI) fell by a larger-than-expected 10.6 million barrels last week, drained by high exports and refinery operations, according to US government data on Wednesday.
When the production side is reduced, the price will be leveraged. What’s more, there is additional positive sentiment from US consumers, one of the world’s largest oil consumers, which is growing.
US consumer spending increased 0.8% last month, the Commerce Department reported and the S&P 500 rose after US inflation data matched forecasts, underscoring expectations the Federal Reserve can halt monetary tightening.
The US central bank could end its cycle of interest rate hikes if the labor market and economic growth continue to slow at their current gradual pace, according to Eric Rosengren, former president of the Boston Fed.
Nevertheless, weak Chinese factory data capped oil’s further gains.
China’s manufacturing activity contracted again in August, according to an official industry survey, fueling fears of a weakening in the world’s second-largest economy.
China’s official purchasing managers’ index (PMI) rose to 49.7 from 49.3 in July, according to the National Bureau of Statistics, but remained below the 50 point level. A reading above 50 points represents expansion from the previous month.
The US government on Wednesday revised down gross domestic product growth for the second quarter to 2.1%, from a reported 2.4% pace last month, and data released separately showed private payroll growth slowed significantly in August.
The increase in world crude oil prices can hoist Indonesia Crude Price which can be a measure of the price of fuel oil (BBM).
However, this year the global oil price assumption is US$90 per barrel so that the increase so far is still below the safe limit of the 2023 state budget macro assumption.
CNBC INDONESIA RESEARCH
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