Angola: Cabinda crude oil prices nosedive in February; Angolan oil production remains subdued
The average price of Angola’s Cabinda crude plunged to an over one-year low of USD 57.3 per barrel (pb) in February, from USD 65.8 pb in January, amid plummeting demand due to the fallout from the Covid-19 pandemic. February’s price was 12.8% below the average price observed in the previous month and 12.1% lower in year-on-year terms.
Global oil prices plummeted throughout February as the fast-spreading coronavirus outbreak severely dented business activity in China and triggered increasing economic havoc in the EU and U.S. In response to a hastening global economic downturn, demand for black gold plunged sharply in February, which, coupled with mounting fears of a global recession later this year and still-elevated oil production levels, sent crude prices diving.
Oil production in Angola edged up to 1.37 billion barrels per day in (mbpd) in February, from 1.35 mbpd in the first month of the year. Meanwhile, according to the latest OPEC report published on 11 March, crude oil production among OPEC countries slumped to 27.77 mbpd in February, from 28.32 mbpd in January.
The global oil price outlook appears increasingly downbeat and uncertain. Turmoil in the global oil markets reached near-unprecedented levels at the beginning of March after the emergency OPEC+ meeting resulted in a failure to agree on further production cuts, instead triggering a price war between Saudi Arabia and Russia and a subsequent crash in global oil prices. This, coupled with an increasingly darkening global growth outlook, sent Cabinda crude oil price diving to a near 17-year low of USD 24.2 pb on 18 March. Both demand and supply side factors will be at play further ahead, with oil output among OPEC, Russia and the U.S., and the full economic impact of the coronavirus pandemic as the key factors to watch.