Oil drops as Angola announces OPEC exit

LONDON:

Oil prices fell by more than $1 a barrel on Thursday after Angola announced it is leaving the Organisation of the Petroleum Exporting Countries (OPEC).

Brent crude futures were down $1.30, or 1.63%, to $78.40 a barrel by 1419 GMT, while US West Texas Intermediate crude was lower by $1.19, or 1.60%, at $73.03. Angola’s oil minister Diamantino Azevedo said the country’s membership in OPEC was not serving its interests.

At a meeting in November, Angola had protested a decision by OPEC to cut its production quota for 2024. Angola’s oil production is around 1.1 million bpd.

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“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,” said Giovanni Staunovo, an analyst at UBS. “However, prices still fell on concern of the unity of OPEC+ as a group,” he added, referring to the producer alliance that includes Russia.

Oil prices had been relatively stable from yesterday’s levels prior to the news out of Angola, with Brent trading near $80 a barrel, as investors balanced higher inventories and record output in the United States with jitters over global trade disruptions in the Red Sea.

Published in The Express Tribune, December 22^nd, 2023.

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