Angola: Oil prices increase in May
May 20, 2015
In April, the average price of Angola’s Cabinda oil rose 5.91% over the previous month, reaching USD 57.5 per barrel. The reading contrasted the 2.43% decrease recorded in the previous month. In annual terms, the average oil price recorded a 48.05% drop, which was a slight improvement over the 50.89% decline recorded in March and marked the 11th consecutive fall in annual prices. That said, the print represented a 35.7% gain over the USD 42.4 per barrel tallied on 13 January, when Cabinda oil recorded the lowest price since 2009.
While oil prices have been on a free fall since July of last year, a slight pickup was recorded in recent weeks. On 15 May, the price of Angola’s Cabinda oil reached USD 62.42 per barrel, which was 12.71% higher than on the same day of the previous month, but still 43.22% weaker than on the same day of the previous year. Nevertheless, 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 April, 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