The price of WTI Crude and Brent Crude is dropping as OPEC+ announced that it will not reduce oil production quota.
Based on data published by Bloomberg, the price of WTI Crude drops 0.63 percent to a level of US$76.25 per barrel while the price of Brent Crude drops by 0.63 percent to a level of US$79.82 per barrel.
Previously, Russia had requested OPEC+ to stop reducing oil production as China lowered its demands below expectations.
Data from the Energy Information Administration stated that the US crude and fuel reserves is also dropping as demand increases following the arrival of summer driving season.
On the other hand US oil production drops to 12.5 million barrel per day on February 2023. The number is the lowest ever recorded since December 2022. Meanwhile, the demand for fuel increases to almost 20 million barrels per day, which the highest ever recorded since November 2022.
Based on latest reports, the leveling of US consumer spending followed by increasing inflation pressure may lead to another benchmark rate increase by the Federal Reserves.
Indonesia lowers non-subsidized fuel price
With the drop of international oil prices, Indonesian state-owned oil and gas company PT Pertamina also lowered the priced for Pertamina Dex and Dexlite type of fuel on May 1, 2023. Following the price adjustment, Pertamina Dex is sold at IDR 14,600 per liter and Dexlite is sold at 13,700 per liter.
However, the prices of Pertamax and Pertamax Turbo fue remains unchanged at IDR 13,300 and IDR 15,000 per liter, respectively.
In addition to the drop of international fuel prices, the Rupiah exchange rate against the US Dollar also contributes to the adjusting of fuel prices. The Rupiah managed to gain a positive note on trading session on Tuesday, May 2, 2023, reaching up to a level of 14,620 per US Dollar.
Both the international fuel prices and the Rupiah exchange rate against the US Dollar is the two main indicator that affects fuel prices in Indonesia.