Govt predicts global crude price to reach $100/barrel

Jakarta (ANTARA News) - The government predicts that the global crude price will reach the level of US$100 a barrel next year, Deputy Minister of Energy and Mineral Resources Widjajono Partowidagdo said.

The global crude price will tend to remain high in 2012, Widjajono said here on Friday.

He said the government would keep monitoring developments in the global oil price particular with regard to the assumed oil price in the state budget.

"If (the global crude price) goes far beyond the assumed oil price in the state budget, we will make adjustments (in the revised 2012 state budget)," he said.

The Indonesia crude price (ICP) has been set at US$95 a barrel under the revised 2011 state budget and US$90 a barrel under the 2012 state budget.

According to a report from the ministry`s crude oil price team, ICP averaged US$111 a barrel in the January-November 2011 period.

The higher-than-expected ICP will increase state revenues, while on the other hand it will add to state spending on oil subsidy.

ICP stood at US$112.94 a barrel in November 2011, up US$3.69 a barrel from US$109.25 a barrel a month earlier.

According to the team, the oil price rose due to high demand as a result of earlier-than-expected winter in the north hemisphere.

Meanwhile, the Energy Information Agency (EIA) in its November 2011 report has predicted global crude oil consumption in 2011 will increase 1.1 million barrels per day due to rising oil consumption in China and other developing countries.

In addition, global crude supplies have come under constant pressure due to non-OPEC member countries` low oil production, leading to a decline in global crude stocks.

To make thing worse, market players are concerned about declining supplies from the Middle East amid the Iranian nuclear program and political upheavals in Egypt and Syria.