The average price of Angola’s Cabinda crude fell from USD 65.5 per barrel (pb) in June to USD 64.9 pb in July. July’s price was 0.9% below the average price observed in the previous month and 11.8% lower in year-on-year terms.
Global oil prices were volatile throughout July. At the end of July, increasing fears over cooling global growth and the impact on oil demand ahead of resumed trade negotiations between China and the U.S. weighed on prices. In addition, the Federal Reserve’s tone in late July added additional downward pressure on global prices. This has more than offset upside pressures stemming from OPEC+ production cuts, elevated geopolitical risks in the Persian Gulf and a marked drop in U.S. oil inventories. Turning to Q3, oil prices plunged sharply in early August, when President Trump announced additional 10% tariffs on USD 300 billion of Chinese goods, fueling concerns over a protracted global slowdown as hopes of a trade deal between the two superpowers in the near future dissipate.
Oil production in Angola fell to 1.39 million barrels per day (mbpd) in July (June: 1.41 million mbpd), the lowest output since October 2006. In a similar fashion, according to the latest OPEC report published on 16 August, crude oil production among OPEC countries moderated from 29.86 in June to 29.61 in July.
Looking forward, the outlook for oil prices remains uncertain. Prices are seen recovering slightly through year-end, thanks to OPEC+ production cuts, while geopolitical tensions and a further tensions between the U.S. and Iran represent upside risks. Nevertheless, uncertainty clouding U.S.-China trade talks, weakening global growth and the booming U.S. shale oil industry will keep a lid on price gains.
FocusEconomics Consensus Forecast panelists expect oil production in Angola to reach 1.49 million barrels per day (mbpd) in 2019. In 2020, the panel sees crude output increasing to 1.50 mbpd.