Angola Commodities June 2016

Angola

Angola: Angola Cabinda oil reaches highest price since July 2015 in June

July 15, 2016

In June, the average price of Angola’s Cabinda oil rose 3.2% over the previous month, reaching USD 47.1 per barrel and marking the highest reading in eleven months. The average oil price was down 21.6% from the same month last year, which was a less pronounced drop than the 27.4% decline seen in May.

Oil prices have remained elevated amid multiple failures of OPEC and non-OPEC countries to reach an agreement to freeze output. Tightening of oil markets thanks to supply outages in producing countries and a decline in U.S. crude production have exerted upward price pressures. However, Cabinda oil prices have experienced some volatility since the United Kingdom’s EU membership referendum on 23 June. More recently, on 14 July, the price of Angola’s Cabinda oil fell to USD 43.56 per barrel, which was 9.72% lower than on the same day in June and was 23.07% lower than on the same day of the previous year. On a year-to-date basis, Cabinda oil prices have gained 24.28%.

In June, Angola’s oil production reached 1.81 million barrels per day (mbpd), inching up from the 1.80 mbpd print tallied in May. According to a report released by the government in July, average oil production in the first half of the year has been in-line with the initial 2016 budget estimate of 1.77 mbpd. The report, however, went on to add that oil earnings will remain depressed as the budget projections for the Cabinda oil prices were revised downwards from USD 45 to USD 41.

FocusEconomics Consensus Forecast panelists expect production to reach 1.84 mbpd this year. In 2017, the panel sees crude output inching up to 1.94 mbpd.


Author: Jean-Philippe Pourcelot, Economist

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Angola Commodity June 2016

Note: Price of the OPEC oil basket in USD per barrel.
Source: Organization of the Petroleum Exporting Countries (OPEC).


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