Angola: Cabinda crude oil prices recover somewhat in May, but remain depressed
On average, Angola’s Cabinda crude oil sold at USD 27.9 per barrel (pb) in May, up from April’s over two-decade low of USD 14.1 pb. The average price in May was up 97.9% month-on-month. However, prices remained depressed by historical standards as they marked the second-lowest level since September 2003 and were down 61.5% year-on-year.
Prices trended up over the month due to the extension of the OPEC+ production cut deal, while global demand edged up as lockdown measures started to be gradually lifted. As such, demand and supply dynamics rebalanced to an extent.
Angolan oil production, meanwhile, edged down to 1.27 million barrels per day (mbpd) in May, down from April’s 1.28 mbpd, in accordance with OPEC+ production curbs. Crude oil production among all OPEC+ members fell to 24.2 mbpd in May from 30.5 mbpd in April.
Prices have risen so far in June, and should recover further going forward on improved demand, amid the continued easing of global lockdown measures, and supply curbs. On the other hand, a pick-up in U.S. shale production as well as the prospect of greater output in Libya cloud the outlook. Moreover, the strength of the post-pandemic economic recovery remains uncertain and a possible second wave of infections poses a further downside risk. Turning to output, Angolan crude production is expected to decline this year compared to last due to agreed output cuts.