Angola Commodities January 2021

Angola

Angola: Cabinda prices rise in January, but remain depressed

February 16, 2021

Angola’s Cabinda oil sold at USD 55.4 per barrel (pb) on average in January, which was up from December’s USD 51.1 pb. The increase marked an 8.4% month-on-month rise (December: +17.4% mom). However, prices remained depressed by historical standards as they dropped 15.8% over the same month a year prior (December: -26.4% yoy).

January’s average price marked an 11-month high, benefiting from optimism regarding the demand outlook. The rollout of Covid-19 vaccination programs should spur road usage and thus boost demand for the black gold. OPEC+ output, meanwhile, rose further in January on the back of greater production in Iran, Saudi Arabia, the United Arab Emirates and Venezuela. Angolan output, however, dropped to 1.16 million barrels per day (mbpd) in January from 1.20 mbpd in December. January’s output marked the lowest in six months.

Looking ahead, prices should rise this year as the global economy recovers from the pandemic-induced downturn, spurring 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 this year compared to 2020, owing to the effect of previous production cuts.

Looking ahead, prices should rise this year as the global economy recovers from the pandemic-induced downturn, spurring 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 this year compared to 2020, owing to the effect of previous production cuts.

FocusEconomics Consensus Forecast panelists forecast oil production to fall to 1.25 mbpd in 2021. In 2022, the panel sees crude output at 1.24 mbpd.


Author:, Economist

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Angola Commodity February 2021

Note: Price of the Cabinda oil basket in USD per barrel.
Source: Organization of the Petroleum Exporting Countries (OPEC).


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