Seven years after it suspended its membership, the Southeast Asian country had asked OPEC earlier this year to reactivate its membership as the country aims to benefit from closer ties with oil producers.
Although the country produces just about 850,000 barrels of oil a day—half of what it consumes and a fraction of the 30 million barrels a day that OPEC members collectively pump—its entry as the 13th member into the group means its output will have to be factored into group’s production ceiling.
Friday’s semi-annual meeting is being closely eyed given the recent sharp in oil prices, which are currently hovering near six-year lows.
In fact, with the entry of Indonesia, OPEC may even have the “perfect excuse” to lift total oil production ceiling, said Barnabas Gan, an analyst at OCBC in Singapore who is projecting a supply hike to 31-33 million barrels a day after Friday’s meeting.
This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.