Indonesia Has 'Mixed Feelings' Before OPEC Meeting
Jakarta. Energy and Mineral Resources Minister Ignasius Jonan said Indonesia has "mixed feelings" ahead of an OPEC — Organization of the Petroleum Exporting Countries — meeting in Vienna to discuss global output-limiting deal in oil production.
According to global investment bank Goldman Sachs, the cut would prop up oil prices to above $50 a barrel.
Indonesia was hoping that the price of oil would stay at $45 — the price it assumed in its current state budget to balance the low domestic inflation and ensure sufficient revenue from oil production.
Jonan offered a restrained comment regarding Indonesia's stance.
"Indonesia will continue to contribute its best efforts for the sake of OPEC development," he said in a statement on Tuesday (29/11).
However, the minister told reporters in Vienna that he had "mixed feelings" before the meeting on Wednesday.
According to Askolani, the Finance Ministry's director general for budgeting, Indonesia, which rejoined the oil cartel in January after a seven-year absence, expects 15 percent of its state revenue to come from oil.
A rise in oil price could help reduce the country's budget deficit, but may complicate efforts to keep domestic inflation at 4 percent, as the government has already reduced fuel subsidies.
In September, OPEC agreed to cap output at around 32.5-33.0 million barrels per day (bpd) versus the current 33.64 million bpd. The organization's meeting on Wednesday aims to lay out details of its implementation.
Oil prices fell on Tuesday, as markets see signs of disagreement among the OPEC members. Brent crude was down more than 2 percent, near $47 a barrel, after Jonan's comment.
The 14-member organization generally operates on a one member one vote principle, but Saudi Arabia, with its largest and most profitable production capacity, often functions as swing producer that can influence other members.
Additional reporting by Reuters
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