Product | Previous Week | % Change |
COFU | $75.69 | 3.84% |
CPOTR | Rp13,505 | 8.52% |
WTI | $75.67 | 3.93% |
BRENT | $77.59 | -0.22% |
USD/IDR | Rp15,062 | -0.84% |
NATURAL GAS | $2.216 | 6.13% |
The price of the ICDX crude oil contract in the last week of March 2023 was observed to have strengthened by 4% supported by several positive sentiments, including fears of tighter supply in the market due to disruptions in the Kurdistan region, signs of increased demand by China, and optimistic signals ahead of the OPEC+ meeting.
The halt of oil production in the Iraqi Kurdistan region has the potential to widen after several oil field operators in the region such as Gulf Keystone Petroleum, DNO and Genel Energy, and Genel on Monday (27/3), stated that their tank capacities were only able to store for several days, after which it may have to suspend production completely. An Iraqi oil ministry official on Thursday (30/3), said no progress had been made regarding the continuation of exports from Kurdistan. This situation has sparked fears that more producers will follow to stop production at the Kurdistan oil fields in northern Iraq, and at the same time has the potential to affect oil supply on the global market considering that oil exports from Kurdistan represent around 0.5% of global oil supply.
From China, consumption of refined fuels in the world's first largest oil importer country is expected to grow 3% this year from pre-Covid levels in 2019, and consumption of natural gas will also grow by around 5.5% from 2022, said the country's energy giant's positive projections PetroChina which was released on Thursday (30/3).
Meanwhile, five sources from OPEC on Thursday (30/3), said that OPEC and its allies will likely stick to their current production cut deal at their meeting earlier this week (3/4). The recent drop in oil prices is a concern for most OPEC+ members, but so far none of the members have proposed taking further action to support the market, the five sources added.
OPEC+ Surprises Markets With Sharp Production Cuts
OPEC and its allies on Sunday (2/4), announced a surprise decision, namely an additional production cut of about 1.66 million bpd that will be in effect from May until the end of 2023. Nine OPEC+ members committed to the additional cuts, led by Saudi Arabia and Russia, which each promised to reduce production by 500 thousand bpd, was followed by the UAE, Iraq, Kuwait, Oman, Algeria, Gabon and Kazakhstan. Previously, the alliance of producing countries had agreed to cut by 2 million bpd until December 2023. With this latest decision, OPEC+ will reduce production to 3.66 million bpd or the equivalent of 3.7 percent of oil supply on the global market.
OPEC+ Decision Triggers Western Tension - Middle East Heats Up
OPEC+'s decision to extend output cuts sparked a backlash especially from the US which has long sought to convince the producer alliance to add more supply to the market to lower fuel prices. The US views the move taken by OPEC+ as unwise and not advisable given the current market uncertainty, said a spokesperson of the US National Security Council on Sunday (2/4). Following later, US Treasury Secretary Janet Yellen said on Monday (3/4) that OPEC+'s move to make additional cuts was unconstructive and would add to the uncertainty of the outlook for global economic growth and burden consumers due to high inflation.
Date | Data/Events | Actual | Expectation | Previous |
4-Apr | USA - API Crude Oil Stocks Change |
| N/A | -6.076M |
4-Apr | USA - API Gasoline Stocks Change |
| N/A | -5.891M |
5-Apr | USA - EIA Crude Oil Stocks Change |
| -1.800M | -7.489M |
5-Apr | USA - EIA Gasoline Stocks Change |
| -1.400M | -2.904M |
8-Apr | USA - Baker Hughes Oil Rig Count |
| N/A | 592 |
Source: ICDX Research