Angola Commodities June 2022

Angola: Cabinda prices continue to rally in June

The average price for Cabinda oil rose to USD 126.8 per barrel (pb) in June, up from May’s USD 114.6 pb. This marked a 10.6% increase month on month. Moreover, prices were up 72.0% year on year.

Oil prices trended upwards over the past month, chiefly on the back of supply fears. Output was disrupted in Ecuador and Libya due to protests, while news reports emerged claiming the president of the UAE had told his French counterpart that Saudi Arabia and the UAE had lower spare oil production capacity than previously thought. On the demand side, weak refinery capacity and the start of the summer driving and travel season in the northern hemisphere also supported prices of oil and its derivatives. That said, growing fears of a global recession capped the price growth in recent weeks.

Turning to output, Cabinda oil output rose to 1.18 million barrels per day (mbpd) in June from May’s 1.16 mbpd. Production among most other OPEC+ members also rose, led by higher output in Saudi Arabia and UAE. In contrast, output in Libya plunged at the end of Q2.

Global oil prices should stay elevated in the second half of 2022, amid diversification away from Russian oil and gas in Western countries and as easing Covid-19 restrictions in China boost global demand up. That said, high inflation and rising interest rates will likely cap global oil consumption and thus weigh on prices in H2. Meanwhile, analysts expect Angolan crude output to increase this year compared to 2021, boding well for the country’s economy.

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