Mutia Yuantisya, Jakarta – The Indonesian Crude Price or ICP in December 2023 plunged to US$75.51 per barrel, a US$4.12 drop compared to November's ICP.

"The drop in ICP was caused by the decrease of global crude prices due to the decline of global oil demand," said the head of communication, public information service, and cooperation bureau of the Energy and Mineral Resources Ministry Agus Cahyono in a statement on Wednesday.

According to Agus, the global crude oil demand freefalls because of a weakening macroeconomy condition. Several central banks in the United States continue implementing a higher interest rate, and a higher demand for electric cars causes a drop in oil demand globally.

Agus believed the oil price decrease is also caused by the global oil production that is steadily on the rise. The United States' stock of distillate and gasoline also increases, meaning, the price will inevitably fall.

Based on the Energy International Association's weekly report, the US oil production increased by the end of December, amounting to 13.3 million barrels per day. Meanwhile, gasoline stocks also increased from 7.9 million barrels in November to 226.1 million in December. The US distillate stock also increased from 5 million barrels to 115.8 million in December.

The decline in oil prices is also caused by the negative sentiment of OPEC+ obedience to cut production, Agus said. There is an existing worry that some countries may follow Angola's steps in pulling out from OPEC+, causing global oil production to veer out of control.

Source: https://en.tempo.co/read/1819815/indonesian-crude-price-plunges-to-us75-51-per-barrel-in-decembe