Price Performance Indicators

COFR Focus:

• (08/10 – 15/10) Crude oil gained 2.91% weekly
• Energy crisis is the main focus of the week

The rupiah- denominated crude oil contract COFR closed last week with a another significant strengthening of 2.91% to the level of Rp 1,164,800 per barrel. During the week, oil was seen “comfortably” moving around its highest level since the last three years – capitalizing on key fundamentals headings that correctively affected crude oil supply levels and overall supply.

From the supply side, the energy crisis that hit Europe and Asia triggered an increase in demand for oil as an energy source to replace gas. Meanwhile, the energy crisis in China forced the government to again order an increase in coal production in Inner Mongolia by almost 100 million tons or an increase of 10%, amid global demands to reduce the use of carbon-based energy sources. India, which also relies on coal as a source of electrical energy, has experienced blackouts of up to 14 hours a day in the eastern and northern regions due to a shortage of supplies. Citing Reuters on Friday, more than half of India's coal-fired power stations, which supply about 70% of the country's electricity, have less than three days in stock.

Furthermore, welcomed by various differences of opinion, the supply side of crude oil also responded to Saudi Arabia's stance in rejecting calls from the US for OPEC+ to add more oil supplies to the market in order to dampen the increase in gasoline prices in the US which has reached its highest level in seven years and the potential for rising heating bills for the United States. next winter.

Strengthening the price foundation, the EIA report released last week also had the same tone. In its Short-Term Energy Outlook report for October released Wednesday, the EIA forecasts Brent crude prices will average $81 per barrel during the fourth quarter of 2021, or $10 more per barrel than the previous estimate released last month by the EIA. Global oil inventories will fall faster than previously thought, the EIA added. In 2022, the EIA predicts that production growth from OPEC+, tight US oil supplies, and other non-OPEC countries will outpace global oil consumption growth.

Market View

Pressure Starts Coming to OPEC+ as Mandate Holder to Stabilizing Prices

Oil prices in the future need to be careful of a consolidated movement that is weighed down by increasing pressure for OPEC+ to immediately add more supplies to curb price spikes. Japanese Prime Minister Fumio Kishida on Monday said he would join the International Energy Agency (IEA) in urging Saudi Arabia, the United Arab Emirates and other major oil producers to increase output and take steps to cushion the impact of the recent spike in energy costs on the economy. domestic industry. In line with Japan, the US also continues to push OPEC to immediately add more supplies.

WEEKLY ECONOMIC DATA & EVENTS CALENDAR

Source: ICDX Research