By Adedapo Adesanya
Oil prices rose as much as 1 per cent on Friday as tensions persisted following Houthi attacks on ships in the Red Sea while Angola’s decision to leave the Organisation of the Petroleum Exporting Countries (OPEC) spurred worries.
During the trading day, Brent crude futures were up by 71 cents or 0.89 per cent to $79.07 per barrel and the US West Texas Intermediate (WTI) crude futures grew by 81 cents or 1.1 per cent to $74.70 a barrel.
Both closed early ahead of the Christmas holiday weekend. For the week, both futures recorded a 5 per cent week-on-week gain, buoyed by rising geopolitical risks due to the Red Sea attacks and potential disruptions to shipping operations.
Maritime carriers are avoiding the Red Sea due to attacks on vessels carried out by the Houthi militant group, which says it is responding to Israel’s war in Gaza. The attacks have caused global trade disruptions through the Suez Canal, which handles about 12 per cent of worldwide trade.
The United States in the week launched a multinational operation to safeguard commerce in the Red Sea, but the Houthis said they would continue to carry out attacks.
The US, Britain, Bahrain, Canada, France, Italy, the Netherlands, Norway, Seychelles, and Spain were among the nations involved in the Red Sea security operation.
Meanwhile, Angola’s decision to quit the OPEC group isn’t having much effect on oil prices but it is raising worries about the future and cohesion of the group with no comment yet after the African producer said that the membership currently provides it with no gains and no longer serves its interests, following in the footsteps of Indonesia, Qatar, and Ecuador.
Angola and Nigeria were given lower crude oil production quotas for 2024 as part of the OPEC+ agreement after the two producers had underperformed and failed to pump to their quotas for years due to security reasons and also a lack of investment in new fields and maturing older oil fields.
The two members earlier disagreed with the ruling, which delayed the latest OPEC meeting, but while Nigeria later showed understanding, Angola, which produces around 1.1 million barrels per day of oil, decided to part ways with the cartel.
Modupe Gbadeyanka