Angola: Cabinda crude oil prices fall to over two-decade low despite lower output
The average price of Angola’s Cabinda crude plummeted to an over two-decade low of USD 14.1 per barrel (pb) in April, from March’s USD 33.1 pb. The average price in April was down 57.5% month-on-month and 80.5% year-on-year, in both cases marking the steepest price drops since at least the late 1990s.
Global oil prices continued to hover around historical lows in April as lockdown measures remained largely in place, weighing heavily on demand. Moreover, the price war fought between Saudi Arabia and Russia flooded the market, further suppressing prices.
Angolan oil production, meanwhile, fell to 1.28 million barrels per day (mbpd) in April, from 1.39 mbpd in March, while crude oil production among all OPEC+ members rose to 30.41 mbpd from 28.61 mbpd in March due to the lingering Saudi-Russia oil price war.
Looking ahead, prices should receive some respite from the historic OPEC+ oil production cuts. However, prices are expected to remain low as the world economy is set to endure a Covid-19-induced recession in the second quarter. Moreover, uncertainty over the impact and longevity of global lockdown measures will continue to drag on prices while the market remains oversupplied in the short term. Beyond that, a gradual rebound in demand as the world economy awakes from lockdown, combined with production cuts, should boost prices. Regarding output, Angolan crude production is seen declining this year due to agreed production cuts.