Most Asian stocks are in the green zone on Monday morning (22/05), tracking Wall Street's performance on Friday where investors' attention shifted from recent political drama - related to US President Donald Trump - to good corporate earnings of Deere and Caterpillar. Meanwhile, rising crude oil ahead of the OPEC meeting on Friday (May 25, 2017) added positive sentiments to markets. Indonesia is again on track to finish at a new all-time record high.

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The upstream oil and gas industry of Indonesia is plagued by companies' lack of interest in exploration amid low crude oil prices, their eagerness to focus on efficiency strategies, and Indonesia's difficult investment climate. At the 41st Indonesian Petroleum Association Convention and Exhibition in the Jakarta Convention Center on Wednesday (17/05) Christina Verchere, President Director of the Indonesia Petroleum Association (IPA), said low oil prices have been the main reason for reduced investment in oil and gas exploration since 2014.

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Asian stocks are mixed on Tuesday morning (16/05). Positive sentiments are brought about by the rising crude oil price and the positive performance of US stocks overnight. However, there is also some concern about the global WannaCry "ransomware" cyber attack that may be linked to North Korea, while the latest data from China confirm that China's growth momentum continues to moderate.

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Stocks in the Asia-Pacific region are experiencing a mixed start of trading on Monday (15/05), while safe haven assets (Japan's yen, US treasuries and gold) continue their gains. Investors are concerned about the size of the ransomware attack, a new missile test that is conducted by North Korea over the weekend, while Asia still needs to digest weaker-than-expected economic data from the USA that was released late last week.

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Investment in Indonesia's oil and gas sector remained bleak in the first quarter of 2017. The key reason why oil and gas companies are still reluctant to invest in any exploration and expansion projects is the low crude oil price that remains below the USD $50 per barrel level. In Q1-2017 investment in Indonesia's oil and gas sector fell 4.1 percent year-on-year (y/y) to USD $2.57 billion. Indonesia's upstream oil and gas regulator SKK Migas targets to attract a total of USD $12.87 billion worth of investment in the oil and gas sector in 2017.

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It should be a great day for Indonesia's benchmark Jakarta Composite Index on Monday (08/05). Several factors are pushing Indonesian (as well as Asian and global) stocks further into green territory. Firstly, Emmanuel Macron's victory in the French presidential election removes concern about stability of the European Union (EU). Secondly, strong US jobs data indicate further US economic growth ahead. Thirdly, the crude oil price is showing a steep recovery so far today. Lastly, Japanese stocks - after ending last week's holiday - are surging, hence being a good reference point for other Asian markets.

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Stocks are under pressure in Asia on Friday morning (05/05) as metal prices continue to slide, while crude oil prices suffered their lowest close since November 2016 after a near five percent plunge yesterday on concerns of a US oil supply glut with analysts forecasting further losses, hence undermining the Organization of the Petroleum Exporting Countries (OPEC)'s earlier efforts to boost the oil price through production cut agreements (chances of seeing deeper cuts in OPEC nations are slim).

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While the Organization of the Petroleum Exporting Countries (OPEC)'s agreed to cut production (a deal that was joined by non-OPEC members, most notably Russia) at the organization's 171st meeting (held in Vienna on Wednesday 30 November), Indonesia decided to temporarily freeze its OPEC membership as it is reluctant to agree to a five percent cut in national crude oil production. Indonesian Energy and Mineral Resources Minister Ignasius Jonan announced this decision.

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The Organization of Petroleum Exporting Countries (OPEC) made a positive surprise move by agreeing to cut crude oil output for the first time in eight years. Reportedly, OPEC reached a preliminary agreement to limit oil production to 32.5 - 33.0 million barrels of oil per day (bpd), down from the current level of 33.5 million bpd. Although a formal agreement is yet to be reached (expected to happen in November) markets warmly welcomed the news: oil jumped 5 percent, while US energy stocks gained overnight. In Asia assets are extending the gains on Thursday (29/09).

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Positive sentiments caused by the Group of 20 economies meeting in China have waned, hence most Asian stocks are lower on Tuesday (26/07). Instead, negative sentiments are caused by falling shares on Wall Street overnight as well as the declining crude oil price (touching a near three-month low). Market participants are also in 'wait and see-mode' ahead of the Federal Reserve's July two-day policy meeting (that starts later today) and the two-day policy meeting of the Bank of Japan that starts on Thursday.

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The central bank of Indonesia expects that Indonesia’s current account deficit will decline to below the three percent of gross domestic product (GDP) mark by the end of this year supported by sharply falling global oil prices and Indonesia’s recent subsidized fuel price hike. Hendar, Deputy Governor of the central bank, said that for every USD $1 decline in global oil prices, the country’s current account deficit narrows by about USD $170 million. Indonesia’s current account deficit fell to 3.1 percent of GDP in Q3-2014 (from 4.06 percent of GDP in Q2-2014).

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In the past week, the global crude oil price has increased considerably due to geopolitical tensions in Iraq which can disturb oil supplies from the Middle East. Up to the end of 2014, provided that no exceptional developments occur, the oil price is expected to range between USD $105-110 per barrel. Meanwhile, the Indonesian government announced that, despite the higher oil price putting pressure on the government’s budget balance, it will not increase prices of subsidized fuels this year.

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