Angola: Cabinda prices cool at the close of the year
Cabinda oil prices cooled further at the close of last year, averaging USD 74.4 per barrel (pb) in December. This was down from November’s USD 81.7 pb price, and marked an 8.8% month-on-month drop. That said, prices were still up 45.8% year-on-year.
Prices likely dropped on the back of increased output volumes, as concerns over the impact of Omicron and supply bottlenecks eased. Output of Cabinda oil rose to 1.10 million barrels per day (mbpd) in December from November’s 1.05 mbpd. Production among other OPEC+ members also increased on average, with higher output levels in Algeria, Equatorial Guinea, Iraq, Kuwait, Saudi Arabia, the UAE and Venezuela offsetting notable production cuts in Libya and Nigeria.
Prices have recovered in the first three weeks of January, amid easing Omicron fears and supply bottlenecks. This year, prices are expected to average higher compared to last year as the global economic recovery continues to gain traction. That said, the rally is forecast to lose steam by the end of the year. Turning to output, the coming online of small blocks and the maturing of other fields should provide a boost to Cabinda oil output. Nonetheless, production will remain markedly below pre-pandemic levels due to the lingering impact of prior OPEC+ cuts and 2020’s oil price slump.