Angola: Cabinda prices moderate in July as recession fears increase
The average price for Cabinda oil eased to USD 119.4 per barrel (pb) in July, down from June’s USD 126.8 pb. This marked a 5.8% decrease month on month. However, prices were still up 57.5% year on year.
Oil prices came down over the past month on the back of global recession fears. Greater price pressures, higher interest rates, a stronger US dollar and new Covid-19 lockdowns in China are weighing on economic activity. A recession would dent global demand for oil.
Turning to output, Cabinda oil output rose to 1.19 million barrels per day (mbpd) in July from June’s 1.17 mbpd. Production among most other OPEC+ members also rose, led by Saudi Arabia, UAE and Kuwait. In contrast, output in Iran, Libya and Venezuela dropped at the start of Q3.
Oil prices should rebound in the third quarter, before easing towards the end of the year on a more bearish market. Greater supply from the US and OPEC+ will put additional downward pressure on oil prices in a weaker market amid recession fears. However, the war in Ukraine remains a key factor to watch. Turning to output, FocusEconomics Consensus panelists expect the production of Cabinda oil to recover this year from last year’s lull. This bodes well for the economy at large.