Angola: Cabinda crude oil prices collapse in March; Angolan oil production remains subdued
The average price of Angola’s Cabinda crude nosedived to an over four-year low of USD 33.1 per barrel (pb) in March, from USD 57.3 pb in February, as the Covid-19 pandemic bruised global demand. March’s price was 42.2% below the average price observed in the previous month and 50.4% lower in year-on-year terms.
Global oil prices collapsed in March, as production soared and demand crashed. Widespread strict lockdowns—in efforts to control the fast-spreading Covid-19 pandemic—have harmed the global economy and, in turn, severely dented demand for crude oil. Meanwhile, an intensifying oil price war between Saudi Arabia and Russia flooded the global market at the end of Q2, adding further downward pressure to the prices. As a result, global crude oil prices nosedived to over 18-year lows in the final days of March.
Oil production in Angola edged up to 1.39 billion barrels per day in (mbpd) in March, from 1.37 mbpd in February. Meanwhile, according to the latest OPEC report published on 16 April, crude oil production among OPEC countries soared to 28.61 mbpd in March, from 27.79 mbpd in February amid the Russia-Saudi Arabia price war.
Despite unprecedent OPEC+ production cuts announced on 12 April, the price outlook remains grim. Uncertainty over demand prospects continues to mount at the beginning of Q2 as the global economy lingers on the brink of recession, owing to widespread measures implemented to contain the Covid-19 pandemic. A bleak demand backdrop seems to overshadow supply-side developments thus far, although the U.S.-backed OPEC+ production cuts should support prices towards the end of Q2. Further ahead, a gradual rebound in demand as the global economy emerges from lockdown measures and constrained oil supply are seen propping up prices by year-end