Angola: Cabinda prices recover some lost ground in June but remain depressed
Angola’s Cabinda crude oil sold at USD 41.1 per barrel (pb) on average in June, up from May’s USD 27.9 pb. The average price in June was up 47.5% month-on-month as oil prices continued to recover. However, prices remained depressed by historical standards as they fell 37.2% year-on-year.
The rise in prices over the month was in part due to the gradual lifting of lockdown measures in Europe and the United States, supporting demand and thus prices. In addition, supply continued to tighten amid the OPEC+ production cut deal extension.
As such, Angolan oil production dropped to 1.24 million barrels per day (mbpd) in June, down from May’s 1.27 mbpd. This marked the lowest level of output since July 2005. Crude oil production among all OPEC+ members fell from 24.2 mbpd in May to 22.3 mbpd in June.
Prices have continued to gradually rise through mid-July on improved demand and supply dynamics amid the easing of global lockdown measures and production curbs. However, a pick-up in U.S. shale production and the prospects of greater output in Libya cloud the outlook. Moreover, the strength of the post-pandemic economic recovery remains uncertain and a possible second wave of infections poses a further downside risk. Turning to output, Angolan crude production is expected to decline this year compared to last due to the agreed output cuts.