Price Performance Indicators
The COFR rupiah crude oil contract ended the last session of last week with significant appreciation, after starting the week with the remnants of the previous bearish pressure – recording a weekly gain of 7.88% to Rp 1,026,400,- per barrel. The subdued developments regarding the Omicron COVID variant, joined by a number of key oil industry sensitive headlines – such as geopolitics and the policies of major producing countries, served as a catalyst.
Looking back on the previous week, oil briefly fell as in Thursday's meeting (02/12) between OPEC and its allies agreed to go ahead with a previously agreed plan of adding 400,000 bpd in January - albeit underscoring the demand risks due to the Omicron variant. However, the issue was immediately corrected by the stance of Saudi Aramco which on Sunday announced an increase in the official selling price of crude oil for January delivery to Asia and the US, indicating optimism that demand will remain strong despite the spread of the Omicron variant. Aramco raised prices for its Asian customers by 60 cents from December to $3.30 a barrel, and for the US it was raised 40 cents to $2.15 a barrel.
On the other hand, the market focus also cannot be separated from the anticipation related to the development of the issue of the Omicron variant which has the potential to again hamper global economic growth and threaten fuel demand. Still discordant with positive developments, the latest issue was absorbed from comments from BioNTech and Pfizer who said that based on recent research shows that the initial two injections of the Pfizer-BioNTech vaccine may only partially protect against Omicron, but the third dose shows signs of promising protection against the Omicron variant. Joining that, the World Health Organization (WHO) reports only 6% of intensive care beds are occupied by Covid-19 patients in South Africa's latest surge in infections.
Current OPEC+ Focus, and Expectations at Next Meeting
The latest to digest and serve as trading guidelines going forward, in its monthly report released Monday (13/12) yesterday, OPEC increased its forecast for global oil consumption for the first quarter of 2022 by 1.1 million bpd, equivalent to annual global consumption growth before the pandemic. OPEC also added that the impact of the Omicron variant on demand is projected to be mild and will not last long, so that OPEC and its allies will not create large surpluses in their production policies. Also confirmed, Iraq's Oil Minister on Sunday said that he hopes that at its next meeting on January 4, 2022, OPEC will maintain its current production policy ie, limit the gradual increase in monthly supply by 400,000 bpd - in line with a statement by Russian Deputy Prime Minister Alexander Novak.
US - PPI m/m
US - Retail Sales m/m
EIA - Crude Oil Inventories
US - FOMC Rate Statement
EU - German Flash Manufacturing PMI
US - Flash Manufacturing PMI
Source: ICDX Research