Angola: Oil prices increase in May
June 17, 2015
In May, the average price of Angola’s Cabinda oil rose 9.40% over the previous month, reaching USD 62.94 per barrel. The reading marked an improvement over the 5.91% increase recorded in the previous month. In annual terms, the average oil price recorded a 39.79% drop, which was slightly up from the 48.05% drop seen in April and marked the 12th consecutive fall in annual prices. That said, the print represented a 48.55% gain over the USD 42.4 per barrel tallied on 13 January, when Cabinda oil recorded the lowest price since 2009.
Despite the pickup recorded in May, oil prices have continued to drop in June. On 4 June, the price of Angola’s Cabinda oil fell to USD 59.71 per barrel, which was 6.13% lower than on the same day of the previous month and 45.60% weaker than on the same day of the previous year. A stronger U.S. dollar and anticipations that Iran will ship more oil in the already flooded market once a full deal is reached with the West continues to weigh on oil prices. The Angolan government heavily relies on oil revenues because oil accounts for 97% of the country’s exports. Plunging oil prices, which have left the government limited space for fiscal consolidation, have also pushed the local currency to all-time lows.
In May, Angola’s oil production reached 1.75 million barrels per day (mbpd), which was an improvement over the 1.70 mbpd recorded in the previous month.
Author: Dirina Mançellari, Senior Economist