Angola: Cabinda prices rise to over two-and-a-half-year high in June
Cabinda oil sold for USD 73.7 per barrel (pb) on average in June, up markedly from USD 68.6 pb in May, and marking the highest price since October 2018. The reading marked a 7.5% month-on-month increase (May: +6.8% mom). Meanwhile, the average price rose 79.2% year-on-year in June, bolstered by a favorable low base effect, as oil prices fell notably last year amid the first wave of the Covid-19 pandemic. However, the print was down from the 146.1% year-on-year rise recorded in May.
Oil demand rose in June, underpinned by global economic growth amid increasing vaccination rates and the lifting of Covid-19 restrictions. Turning to production, Angolan output eased marginally to 1.11 million barrels per day (mbpd) in June from 1.12 mbpd in May. Meanwhile, OPEC+ production rose amid the easing of output cuts.
Prices for oil should average higher this year than in 2020 as demand for oil picks up as the global economic recovery firms. That said, the appearance of new virus strains and further waves that prompt tighter restrictions, coupled with uncertainty over vaccine availability, pose downside risks to the outlook. In terms of output, Angolan production is projected to ease slightly this year over 2020 due to the effects of previous production cuts.