December ICP drops amid global economic slowdown concerns

By Romel S. Gurky

The Ministry of Energy and Mineral Resources (ESDM) reported that the Indonesian Crude Price (ICP) for December 2024 declined to $71.61 per barrel, down from $71.83 per barrel in November. This price was confirmed in the Minister of Energy and Mineral Resources Decree No. 9.K/MG.01/MEM.M/2025, issued on January 9, 2025.

Chrisnawan Anditya, Acting Head of the Bureau of Communications, Public Information Services, and Cooperation at ESDM, explained that the decrease in the ICP was largely driven by falling global oil prices, attributed to concerns over a global economic slowdown.

"The drop in crude oil prices is influenced by several factors, including the weakening economy in China, which has led to reduced demand for crude oil. Despite various stimulus packages announced by the Chinese government, these measures have not yet resulted in an immediate increase in oil demand," he said in a statement on Thursday.

Another significant factor behind the price dip is a revision of global oil demand forecasts by the Organization of the Petroleum Exporting Countries (OPEC). OPEC lowered its projections for 2024 and 2025 by 210,000 and 300,000 barrels per day (bpd), respectively. The revised figures now stand at 103.82 million bpd for 2024 and 105.57 million bpd for 2025.

"The decline in Indonesia's crude oil price has also been impacted by the strengthening of the US Dollar against other major currencies, which has reached its highest level in two years," added Chrisnawan.

Further contributing to the downward trend, the International Energy Agency (IEA) reported a significant rise in US gasoline stockpiles. At the end of December 2024, US gasoline reserves increased by 9.1 million barrels to 223.7 million barrels, compared to the previous month.

In the Asia-Pacific region, crude oil prices were further affected by a drop in China's Caixin General Services PMI (Purchasing Managers' Index), which fell to 51.5 in November 2024 on a month-to-month basis. Additionally, Taiwan's crude run rate decreased to 73.9% at the end of December 2024, down from 72.9% in November 2024, with 795,000 bpd of a total capacity of 1.1 million bpd.

Editing by Reiner Simanjuntak