The average price for Cabinda oil rose to USD 114.6 per barrel (pb) in May, up from April’s USD 106.5 pb. This marked a 7.6% increase month on month. Moreover, prices were up a notable 67.1% year on year.
Prices for the black gold were buoyed by the prospect of an EU ban on Russian oil, which was ultimately agreed upon on 31 May. The European Union will ban roughly 90% of all oil imports from Russia by the end of this year. In addition, demand dynamics improved on the back of the summer driving and travel season in the northern hemisphere. Meanwhile, weak refinery capacity limited supply. Turning to output, Cabinda oil output rose to 1.15 million barrels per day (mbpd) in May from April’s 1.14 mbpd. Production among other OPEC+ members diverged. Output in Libya nosedived, while production was also cut notably in Nigeria, Gabon, Iran and Iraq. On the other hand, output in Kuwait, Saudi Arabia and the United Arab Emirates rose notably.
Prices continued to trend upwards midway through June on the back of a looming diversification away from Russian oil and gas in Western countries, while global demand for oil should be picking up. However, high inflation and rising interest rates should cool demand towards the end of the year. Regarding output of Angolan Cabina oil, panelists expect greater production this year compared to the previous year.
FocusEconomics Consensus Forecast panelists forecast oil production to rise to 1.16 mbpd in 2022. In 2023, the panel sees crude output at 1.11 mbpd.