Angola Commodities April 2019

Angola: Cabinda crude oil prices surge to six-month high in April amid a slight rebound in Angola’s output

The average price of Angola’s Cabinda crude oil rose from USD 66.8 per barrel (pb) in March to a six-month high of USD 72.2 pb in April. April’s price was 8.1% above the average price observed in the previous month and 0.3 higher in year-on-year terms.

Global oil prices surged in April, largely driven by supply-side developments: The successful implementation of the production cuts agreed upon by OPEC members and Russia bolstered prices in the first half of April, with further support stemming from falling oil output in Venezuela, reflecting years of underinvestment in the industry and ongoing U.S. sanctions. Furthermore, the Trump administration’s decision to end waivers that allowed eight counties to buy Iranian oil helped prop up global oil prices. On the demand side, better-than-expected real sector data in China—likely the result of the government´s fiscal stimulus program—also pushed up prices.

Oil production in Angola recovered from 1.47 million barrels per day (mbpd) in March to 1.53 mbpd in April, the best result in three months. Meanwhile, according to the latest OPEC report published on 14 May, crude oil production among OPEC countries remained stable at March’s 30.03 mbpd in April.

Looking forward, the outlook for oil prices remains somewhat uncertain. Escalating trade tensions between China and United States sent the prices sliding in early May, as fears of weaker demand for black gold intensified. In the longer term, crude oil prices are seen broadly stable, as lower production by OPEC+ countries and supply concerns in Iran, Libya, Nigeria and Venezuela are expected to largely offset elevated production levels in the U.S as well as spillovers from the China-U.S. trade war.

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