Angola Commodities July 2016

Angola

Angola: Rally in Angola Cabinda oil comes to an end in July

August 18, 2016

In July, the average price of Angola’s Cabinda oil dropped 6.3% over the previous month, reaching USD 44.2 per barrel. July’s result marks the first decline in oil prices after five consecutive monthly increases. The average oil price was down 20.5% from the same month last year, which was a less pronounced drop than the 21.6% decline seen in June.

Oil prices in July dropped due to growing uncertainty in international markets following the Brexit vote in the United Kingdom and concerns over ongoing oversupply and weak demand.

More recently, on 17 August, the price of Angola’s Cabinda oil rose to USD 48.29 per barrel, which was 7.0% higher than on the same day in July and was 3.6% higher than on the same day of the previous year. On a year-to-date basis, Cabinda oil prices have gained 37.8%. Oil prices have gained some of the lost ground in July as traders anticipate a potential meeting in September between OPEC and non-OPEC members to cut output.

In July, Angola’s oil production reached 1.81 million barrels per day (mbpd), matching the print observed in June. Sonangol, Angola's state-owned oil enterprise, released the 2015 Annual Report in early August. According to the report, oil production in 2015 went up from 1.68 mbdp in 2014 to 1.78 mbpd, representing a 6.0% increase. Despite higher production, oil earnings in 2015 dropped 35% compared to 2014 and the president of Sonangol said that 2016 is set to be another difficult year as still-low oil prices will keep earnings subdued.

FocusEconomics Consensus Forecast panelists expect production to reach 1.84 mbpd this year. In 2017, the panel sees crude output inching up to 1.94 mbpd.


Author: Jean-Philippe Pourcelot, Economist

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Angola Commodity July 2016

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


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