Crude Prices Drop After Angola Quits OPEC
Crude prices slumped on Thursday after Angola quit the OPEC oil cartel, while Wall Street stocks rebounded after a streak of records was snapped.
The price of the main international and US crude contracts dropped more than 1.5 percent after Angola said it was leaving as it did not want to go along with further production cuts that OPEC and 10 Russian-led allies agreed last month.
They later pared their losses.
In an effort to prop up prices, the OPEC+ alliance has implemented supply cuts of more than five million barrels per day (bpd) since the end of 2022.
But oil prices still slid to their lowest levels in nearly six months following the latest OPEC+ decision. The United States has been pumping at record rates, as have Brazil and Guyana, while the weak global economy has raised concerns about demand.
ActivTrades analyst Ricardo Evangelista said the departure of Angola, a relatively small producer at 1.1 million barrel per day, would hurt OPEC less than if it had been a big producer such as Iraq.
But the timing could not be worse “when the cartel is working hard to convince its members to voluntarily reduce production in order to support prices”, Evangelista said.
