Nippon Capital AM says Indonesia plans to rejoin OPEC after a 7 year hiatus from the cartel that supplies 40% of the world’s crude oil.
Osaka, JAPAN – Nippon Capital AM (Nippon Capital Asset Management J-LLC) have reported that seven years after the Organization of Petroleum Exporting Countries (OPEC) agreed to suspend Indonesia’s membership, Indonesia is petitioning to rejoin the cartel despite the fact that, if admitted, it will be the group’s sole net importer of oil.
The country’s membership was suspended at its own request after it found itself relying increasingly upon imports but with demand remaining robust in its fast-growing economy, it hopes that rejoining OPEC will enable it to secure future oil supplies.
“Indonesia consumes 1.5 million barrels a day but only produces a little short of 900,000 a day so many are puzzled as to why it would want to rejoin but there is no condition of membership that says a member must be a net exporter of oil rather than a net importer,” explained Charles Worth, Executive Vice-President and Co-Chief Investment Officer at Nippon Capital AM.
Indonesia’s economy is the largest in ASEAN (Association of Southeast Asian Nations) and is the world’s 4th most populous country with nearly 250 million people according to the last census in 2013. Nippon Capital AM has included several Indonesian conglomerates in its latest conviction buy list and cites the country’s young demographics as a major attraction.
Indonesia has traditionally heavily-subsidized the cost of fuel and up until recently, it has found it difficult to reduce this assistance without sparking protests from consumers. “The collapse in oil prices last year gave the Indonesian government space to reduce its largesse but economic growth has seen demand rise so the timing of its petition to rejoin OPEC is understandable,” concluded Worth.
About Nippon Capital AM
Nippon Capital Asset Management J-LLC is a ‘fee only’ financial advisory service. This way you can be assured that we are acting in your best interests at all times. Other services have ‘special’ relationships with banks and financial institutions, from which they are paid a negotiated percentage of any deals that they broker on their behalf. These third party arrangements distort how investments should be dealt with presenting a clear conflict of interest. We do NOT operate in this manner and offer total commitment to our valued clients, without receiving any compensation from third party sources in the industry.
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Contact Nippon Capital AM:
1-1-43, Abenosuji, Abeno-Ku,
Osaka-Shi, Osaka Abenoharukas
24f Osaka
Japan
Web: http://www.nipponholdings.com
Email: info@nipponholdings.com
Telephone: 81645604471