Minister Sri Mulyani: Crude Prices Increase only Temporary

TEMPO.CO, Jakarta - Finance Minister Sri Mulyani Indrawati predicted that global demand of crude oil will remain low and not experience any increase in the near future. Therefore, Sri asserted that the current increase of crude price, up to a level of US$55 per barrel, will only be temporary and will later decline in line with declining demands.

"In overall, in 2017, I think it is still possible that crude price will be in accordance with [the government's] assumption at US$45 per barrel," Sri said on Tuesday, December 6, 2016.

Sri said that the decision made by the Organization of the Petroleum Exporting Countries (OPEC) to limit oil production at a level of 1.2 million barrels per day came at a surprise. "It turns out [OPEC] can came up with a commitment in terms of volume. But in reality, there is a question whether the total global [oil] production can match the demands," Sri said.

With the increasing uncertainty, there is no way to predict forecasts made by other countries in relation to crude demands. "Events occurring in Europe: the Brexit, the Italian referendum, and the election in France, Germany and the Netherlands will affect [economic] recovery projections in Europe," Sri added.

Meanwhile, Sri said that the world will continue to observe policies made by new United States President-elect Donald Trump to trigger demands.

ANGELINA ANJAR SAWITRI