At the EST midday mark during Thursday, 21 December, trading, the oil price dipped by 1.28%. The slide comes after Angola disclosed it is leaving the Organisation of the Petroleum Exporting Countries (OPEC). This constitutes more than a $1 drop per barrel.
Oil prices down by more than $1 after Angolan exit from OPEC
At a stage, brent crude was down 1.63% at $1.30 per barrel. US West Texas Intermediate crude clocked a 1.60% or $1.19 loss. Reportedly, in November, OPEC proposed cutting Angola’s 2024 production quota, which is approximately 1.1 million barrels per day. Reuters quoted a UBS analyst who commented:
From an oil market supply perspective, the impact is minimal as oil production in Angola was on a downward trend, and higher production would first require higher investments. However, prices still fell on concern of the unity of OPEC+ as a group.
The OPEC+ producer league includes Russia. Before Angola announced its OPEC departure, oil prices held a relatively steady course, consistently hovering around the $80 a barrel mark, with investors juggling higher inventories and record outputs in the US against trade issues in the Red Sea.
Reuters, quoting an analyst from PVM, stated the high US crude outputs made the markets nervous about which trade routes are accessible after the Houthi shipping attacks. According to the US Energy Information Administration, the crude inventories spiked by 2.9 million barrels in the week leading up to 15 December. This is in stark contrast to financial forecasts, predicting a 2.3-million-barrel drop.
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Angola’s decision seemed to have rocked this steady boat somewhat. The country’s oil minister told the media its current OPEC membership does not serve its interests.
