Oil may drop below RI's $22 target despite recent surge<\/p>\n
Moch. N. Kurniawan
\nThe Jakarta Post
\nJakarta<\/p>\n
The average international oil price this year would likely
\ndrop below the 2002 state budget assumption of US$22 per barrel
\ndespite the current surge in the price of the commodity,
\naccording to the director general of oil and gas Rachmat Sudibyo.<\/p>\n
Rachmat said on Tuesday that the average oil price would
\nremain low this year due to the global economic slowdown.<\/p>\n
\"It's quite hard to achieve (average) oil prices of $22 per
\nbarrel. The world oil demand will remain sluggish as the global
\neconomy is not really improving,\" he told reporters.<\/p>\n
He cited the tedious economic revival of the two major oil
\nimporting countries, the U.S and Japan.<\/p>\n
Industrialized nations suffering from the current global
\neconomic slowdown may also exert pressure to prevent oil prices
\nfrom rising, thereby avoiding a negative impact on the recovery
\nprocess of their economies.<\/p>\n
Indonesia relies heavily on oil export revenues to finance its
\nstate budget. This year, the government has targeted some Rp
\n59.68 trillion (around US$6 billion) in revenue from the oil and
\ngas sector.<\/p>\n
According to one estimate, there would be a potential loss of
\naround Rp 5 trillion per year if oil prices fell by only $1 from
\nthe 2002 budget assumption of $22 per barrel.<\/p>\n
Oil prices have plunged to as low as $16 in the wake of Sept.
\n11, a tragedy that has exacerbated the global economic slump.<\/p>\n
This situation has forced the Organization of Petroleum
\nExporting Countries (OPEC) and several non-OPEC countries to cut
\ntheir output to help raise oil prices, but the move only pushed
\noil prices to around $20.<\/p>\n
The U.N. Department of Economic and Social Affairs said that
\nthe world economy would see 1.5 percent growth this year compared
\nto 1.3 percent last year.<\/p>\n
It forecasted the oil prices to remain at about $20 this year
\nfrom an average $24.5 in 2001.<\/p>\n
Rachmat, however, said that unexpected world political
\nupheaval such as the growing tension between the U.S. and Iraq
\ncould push oil prices up.<\/p>\n
In London on Monday, oil prices hit a six-month high, with a
\nbarrel of benchmark Brent North Sea crude for April delivery as
\nhigh as $24.05 at one point.<\/p>\n
The oil price spurt was sparked by fears that Iraq, one of the
\nworld's major oil producers, was developing weapons of mass
\ndestruction, which has increased the risked of U.S. military
\naction against Saddam Hussein's regime.<\/p>\n
Rachmat added that the government would closely monitor the
\nrecent development of high oil prices to calculate the impact on
\ngovernment revenue and oil subsidies.<\/p>\n
Meanwhile, OPEC welcomed on Tuesday the surge in world oil
\nprices, but warned that the hike does not reflect market
\nfundamentals and urged continuing output discipline.<\/p>\n
The warning came as the 11-member cartel's own benchmark crude
\nprice rose back up into the cartel's target range for the first
\ntime since last September.<\/p>\n
The price, used by the 11-member organization to set its
\nproduction policy, rose to 22.44 dollars on Monday, according to
\nOPEC secretariat calculations.<\/p>\n
An OPEC source was upbeat on the price surge, but warned it
\nmay not last since it was based largely on concerns about Iraq.<\/p>\n
\"It is good for us, but it does not reflect the actual market
\nconditions. It's all about psychology, its a reaction to the
\nrumors of military action in Iraq,\" said the source, requesting
\nanonymity.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/oil-may-drop-below-ris-22-target-despite-recent-surge-1447899208",
"image": ""
},
"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
}