JAKARTA (TheInsiderStories) — Good morning! United States (US) crude oil prices fell to its lowest level in seven months at the end of trading on Monday (05/11), along with waning fears that the country’s sanctions against Iran.
The West Texas Intermediate (WTI) oil price for the December contract fell to US$63.10 per barrel on the New York Mercantile Exchange, has dropped 6.6 percent compared to last week. The total volume traded also reached around 10 percent below the average of 100 days.
While, the price of Brent oil for January delivery was able to rise 34 cents and ended at the level of $73.17 per barrel on the ICE Futures Europe exchange based in London. The global benchmark oil traded at $9.96 premium against WTI for the same month.
However, President Donald Trump’s administration gave relief to China and seven other major buyers so they could continue to buy a little crude from Iran.
Oil prices slid from their highest level in four years last month as speculation grew that the US government would provide relief to reduce gasoline prices ahead of midterm elections in the the country. At the same time, other producers in the Organization of the Petroleum Exporting Countries (OPEC) pledged to offset the supply gap.
Meanwhile, a trade war between the US and China sparked fears that fuel demand will be depressed even when President Trump expressed his desire to reach an agreement with China.
Go to domestic issues. Statistic Indonesia reported the country’s economic growth in third quarter (3Q) evinced a slowdown compared to the previous quarter. The agency announced that the economy grew 5.12 percent, lower than 5.27 percent in the 2Q.
The economic growth was contributed by household expenses at 2.69 percent and gross fixed investment component at 2.24 percent. Whilst other components were only 0.24 percent.
Indonesia’s economic slowdown followed global economy turmoil which also impacted European countries, China, South Korea, Singapore, and others. But so far, Indonesian government seems to be optimistic in achieving the economic growth target at 5.2 percent.
As a part of collecting state revenue, government targeted more excise tax from tobacco products. In 2019, the tobacco excise tax is targeted to reach Rp158 trillion (US$10.53 billion), or increase 7 percent compared to this year. Tobacco product contributes more than 96 percent of the total tax excise target in 2019.
Furthermore, Lion Air JT-610 search and rescue operation in Karawang waters, West Java, is still ongoing. Based on Flight Data Recorder (FDR) investigation, the plane’s air speed indicator was already broken in the last four flights.
Those flights were Lombok-Denpasar on Oct. 27th, Manado-Denpasar and Denpasar-Jakarta on Oct. 28th, then the Jakarta-Pangkal Pinang on Oct. 29th.
Go to politic issues. Two famous lawyers in Indonesia has picked as legal counselor of two presidential candidates for 2019 Election. The controversy lawyer Hotman Paris Hutapea has picked by Prabowo Subianto – Sandiaga Uno camp while Yusril Ihza Mahendra helped Joko Widodo – Ma’ruf Amin camp.
In the financial market, yesterday Rupiah kept regaining it strength, and brought Jakarta Composite Index to green territory, increased by 0.24 percent to 5,920.59. Foreign investors kept buying and booked Rp922.54 billion net buy.
Analysts predicted that the slowly-gaining-power Rupiah won’t last long. Some sentiments like US-China trade wars, also Fed rate hike, potentially bringing Rupiah to depreciate.
May you have a profitable day!
US$1: Rp 15,000
Written by Linda Silaen and TIS Intelligence Team, Please visit our new website to get more insight on Indonesia’s economy: www.tisintel.com