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Indonesia is inventing new oil price formula

Volatility of the Indonesia Minas crude have to course countryís authorities to take actions.

26.Jun.16 10:08 PM
By Vladimir Vasiliev


The price of the Indonesia Minas crude rose sharply and in May was $49.46/barrel which is up $12.21/barrel from the previous month. This trend had to course government response and it did. There is no specific information about how this new formula will look like yet. The final decision is to be made by the Ministers. That applies to the date of this decisionís implementation too.

The experts and regional market traders suppose that it would take at least several months to implement any changes. To be more precise from two to six months and this period does not depend on decision makers. All cargoes to be delivered in a couple of forthcoming months are already traded.

The discussion is still continuous and various options include possibility to maintain current system. Obviously traders will support this option and government is going to let them have their say.

In short, so far it is only governmentís desire to change the formula. No specific information. Just a ripple on the surface but with potential.

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