Price Performance Indicator
The COFR crude oil contract again recorded a weekly substantial appreciation of 3.96% from the level of Rp 918,300 per barrel to the level of Rp 954,700 per barrel. Oil's slow but steady rally has benefited from a combination of mixed catalysts ranging from good demand expectations and a bit of news on trade politics from China – although still overshadowed by market caution ahead of next week's OPEC+ meeting and global pandemic conditions.
At the beginning of the week, the positive catalyst came from the tax policy that will be implemented in China from mid-June – prompting buyers in China to increase crude oil imports in recent months. The new levies, targeting three oil-related products, have forced refiners to take in more crude which produces more diesel in the coming months.
Still acting as positive catalysts, ahead of the Memorial Day holiday which will take place this weekend, the American Automobile Association (AAA) estimates that there will be a 60% jump or 37 million road users compared to the 23 million road users during the pandemic last year. AAA also added that the current US gasoline demand is around 9.48 million bpd, the highest since March 2020. This projected increase in bombast also joins to provide a meaningful foundation for crude oil in advance.
Turning to the barrier of oil prices to jump further, the negative development of the Covid-19 situation in Asia, especially India sparked new concerns. India reported an increase in infections and deaths in 21 major districts of which half saw an increase in deaths of more than 100 percent. Across the West, a number of differences of opinion between scientists and policy makers regarding the reopening of economic activity and people's mobility were also responded as so by the price of oil.
OPEC+ scheduled to meet tomorrow
The market focus in the near future will be on the OPEC+ meeting which will affect the amount of global oil supply. OPEC and its allies are scheduled to meet on Tuesday to discuss the OPEC+ production quota policy. Analysts expect the group to stick with its plan to gradually reduce production cuts through July. Any outcome coming out of this moment could dramatically confirm or even further correct oil prices which have taken advantage of a series of positive catalysts last week.
All – OPEC-JMMC Meetings
EIA - Crude Oil Inventories
US - Average Hourly Earnings m/m
US - Non-Farm Employment Change
Riset Indonesia Commodity and Derivative Exchange