Oil prices saw a modest recovery on Friday December 22nd, rebounding from earlier declines influenced by Angola’s departure from OPEC, even as ongoing tensions in the Middle East continued to grip the market’s attention.
Brent futures closed slightly higher, edging up by eight cents or 0.1 percent to settle at $79.47 a barrel. The Angolan sales benchmark reached $79.79, climbing 0.5 percent from the previous day when news of Angola’s exit had nudged prices down by 0.4 percent to $79.29.
On the other side, US West Texas Intermediate (WTI) futures marked a modest gain of 10 cents or 0.1 percent, ending at $73.99 a barrel. However, earlier in the session, WTI had surged $1.0 above Thursday’s close.
Throughout the week, both Brent and WTI futures exhibited a robust weekly gain of over 4.0 percent. This upward momentum was fueled primarily by escalating geopolitical tensions, notably attacks in the Red Sea, heightening concerns over potential disruptions to shipping operations.
The extremist Houthi group’s assaults on ships in the Red Sea prompted several shipping lines, including Maersk and CMA CGM, to divert vessels, announcing additional fees due to the heightened risks.
These disruptions have impacted the Suez Canal, a vital trade artery accounting for approximately 12 percent of global trade.
While geopolitical concerns bolstered oil prices, the market experienced a setback on Thursday following Angola’s announcement of its OPEC withdrawal.
Angola, a producer of 1.1 million barrels per day, cited its dissonance with the organization’s decisions, particularly objecting to the broader OPEC+ group’s directive to curtail Angola’s 2024 production quota.
