Angola Commodities November 2020

Angola: Cabinda prices rise in November, but remain historically depressed

Cabinda oil sold at USD 43.5 per barrel (pb) on average in November, up from September’s USD 40.3 pb. The print marked a three-month high after two consecutive months of falling prices. November’s uptick was likely driven by positive news on the Covid-19 vaccine front, with several successful trials boosting oil demand. Consequently, the average price in November was up 8.0% month-on-month (October: -1.8% mom), but prices remained historically depressed as they fell a whopping 32.8% year-on-year (October: 34.8% yoy).

The uptick came chiefly on the back of improved demand dynamics as global output levels rose amid stronger production in Iraq, Libya and Nigeria bolstering OPEC+ output. Moreover, Angolan output rose to 1.15 million barrels per day (mbpd) in November from 1.12 mbpd in the prior month, which has marked the lowest level of production since February 2005.

Prices should pick up further in 2021 on recovering global economic activity, boosting demand. However, questions of the strength of the post-pandemic recovery remain as well as geopolitical tensions. Turning to output, production of Angolan Cabinda oil is expected to remain around this year’s level; strengthening demand amid a global economic recovery is expected to be offset by the effect of previous production cuts.

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