Angola: Cabinda prices cool slightly in November on resurgent Covid-19 fears
Cabinda oil prices dropped to an average of USD 81.7 per barrel (pb) in November. This was down from October’s USD 83.6 pb, marking a 2.3% month-on-month decrease. However, prices were still up 87.8% year-on-year.
Prices suffered from renewed coronavirus fears amid the emergence of the Omicron variant, which was first discovered in South Africa in late November. This raised concerns over a potential global economic slowdown and the reintroduction of restrictive measures to combat the spread of the new, seemingly more infectious strain. New lockdowns would deal a blow to short-term demand prospects. Turning to production, output of Cabinda oil dropped from 1.10 million barrels per day (mbpd) in October to 1.05 mbpd in November. Among other OPEC+ members, output fell in Republic of Congo, Iran and Libya. However, production jumped in Iraq, Nigeria and Saudi Arabia.
Prices have continued to decline so far in December, weighed down by Omicron fears. Next year, prices should average higher compared to 2021 as the economic recovery gains steam. However, the rally is expected to lose steam by the end of 2022, while lingering Covid-19 uncertainty clouds the outlook. Regarding production, Cabinda oil output is expected to pick up pace next year as small blocks will come online and other fields continue to mature. However, production will remain markedly below pre-pandemic levels, weighed on by the impact of prior OPEC+ cuts and l2020’s oil price slump.