"I myself think the situation is very `temporary`. Why?. It is because Egypt is not an oil exporter and therefore the crisis in that country will not have a big impact," Coordinating Minister for Economic Affairs Hatta Rajasa said here on Friday.
Hatta said the oil price hike was a temporary phenomenon. Even, he said, oil supply tended to be ample. He said OPEC members had also expressed their commitment to increasing their oil production.
Besides that, he said the declining tendency in the oil demand would also affect the oil price to make it relatively stable. The drop in demand has been recorded to happen in the US, he said.
Hatta however admitted the government continued monitoring the development of the oil price. He said he had also continued coordinating with Bank Indonesia with regard to it.
He said the coordination was aimed at anticipating possible hike of goods prices as a result of the world oil price hike.
"Especially we are really safeguarding the inflation rate," he said.
Finance Minister Agus Martowardojo shared the view saying that the world oil price hike was only temporary.
The Brent crude oil has recorded a high increase in the past 28 months to reach above US$103 per barrel on Thursday due to the crisis in Egypt creating new worries about energy supply in the oil rich countries in the Middle East.
"The uncertainty which is still continuing in Egypt has pushed the Brent crude price to reach US$103 per barrel tonight, which was the highest since September 2008," Kommerzbank analyst Carsten Fritsch said.
The Brent North Sea for March delivery rose to US$103.37 per barrel which was the highest since September 26, 2008.
The latest price was recorded at US$102.27 per barrel in trading in London, down seven cents compared to Wednesday`s closing.
The Light Sweet for March delivery in New York market dropped 22 cents to US$90.64 per barrel.
The oil market is worried the crisis in Egypt would spread to other countries particularly in the rich oil countries in the Middle East.
Although Egypt is not a main oil producer the Suez Canal is located in that country where around 2.4 million barrels of oil were shipped through the canal, which is equal to half of Iraq`s production.
According to the weekly report of oil reserves of the US Department of Energy crude reserves had risen sharply in a row in the third week.
The crude reserves rose 2.6 million barrels to 343.2 million barrels in the week ending January 28, as expected, according to the official data.(*)
Editor: Ruslan Burhani
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