Jakarta (Indonesia Window) – Indonesia Crude Price (ICP) in December 2020 was set at 47.78 U.S. dollars per barrel, or an increase of 7.11 U.S. dollars per barrel compared to that in November 2020 at 40.67 U.S. dollars per barrel.

The increase was driven by global economic stretch after the approval of the mass vaccination for COVID-19 in the European and American regions.

"Approval of the vaccination process has fostered market optimism and contributes to world oil demand," Indonesian Ministry of Energy and Mineral Resources’ spokesperson Agung Pribadi said here on Friday.

In addition, the agreement between members of the Organization of the Petroleum Exporting Countries (OPEC) and their allies to continue cutting production by 7.2 million barrels per day starting January 2021 also triggered an increase in the ICP.

In December 2020, the OPEC reported an increase in supply demand for 2020 of 0.1 million barrels per day compared to the previous projection, bringing it to 22.2 million barrels per day.

On the other hand, in that year there was a decline in oil supply from non-OPEC countries, especially from Brazil, the United States, Britain and Norway, by 0.08 million barrels per day. This figure is lower than the previous projection.

"The OPEC projected global economic growth for 2021 to increase by 0.1 percent compared to the previous month's projection, which was supported by Japan, Brazil, Russia and several other OECD (Organization for Economic Cooperation and Development) countries," Agung said.

Other sentiments from the ICP increase is market optimism on the trade agreement between the European Union and Britain after Brexit, as well as the heating up of such geopolitical conditions in several crude oil producing countries as the explosion of two oil wells in Kirkuk (Iraq).

Another factor is the re-construction of the Nord Stream 2 gas pipeline from Russia to Germany against sanctions imposed by the United States.

Other triggering factors originating from Asia and Pacific were the high demands for crude oil from India of 4.34 million barrels per day in the fourth quarter of 2020 (an average of 4.14 million barrels per day); China at 13.98 million barrels per day in the fourth quarter of 2020 (an average of 12.81 million barrels per day), as well as other countries in the region.

The development of the average price of major crude oil on the international market in December 2020 compared to November 2020 is as follows.

Dated Brent increases by 7.20 USD per barrel from 42.66 USD per barrel to 49.86 USD per barrel.

WTI (Nymex) increases by 5.72 USD per barrel from 41.35 USD per barrel to 47.07 USD per barrel.

Basket OPEC increases by 5.98 USD per barrel from 42.61 USD per barrel to 48.59 USD per barrel.

Brent (ICE) increases by 6.24 USD per barrel from 43.98 USD per barrel to 50.22 USD per barrel.

Reporting by Indonesia Window