Angola: Cabinda prices rise in December, but remain historically depressed
In December, Cabinda oil sold at USD 51.1 per barrel (pb) on average. This was up from November’s USD 43.5 pb, and marked a 10-month high. Prices benefited from an improved demand outlook amid the rollout of Covid-19 vaccine programs, which should boost road usage and thus demand. Moreover, the price jumped 17.4% month-on-month (November: +8.0% mom); however, prices remained depressed by historical standards and they dropped 26.4% year-on-year (November: -32.8% yoy).
An improved outlook on demand amid various effective Covid-19 vaccines chiefly drove the rise in prices as demand picked up, with OPEC+ output rising on the back of a marked increase in production in Libya, while output also increased in Iran, the UAE and Venezuela. Moreover, Angolan output rose to 1.20 million barrels per day (mbpd) in December, from 1.18 mbpd in the prior month.
Looking ahead, prices should rise this year as the global economy recovers from the pandemic-induced downturn, boosting demand for oil. However, uncertainty remains over the strength of the post-pandemic recovery amid questions regarding vaccine availability and effective rollouts. Turning to output, Angolan production is set to ease slightly in 2021 compared to last year due to the effect of previous production cuts.