On Monday, oil prices elevated on fears that Houthi will escalate its Red Sea attacks despite Angola’s OPEC+ exodus raising 2024 output guidance.
US benchmark West Texas Intermediate (WTI) crude oil February futures added 0.31% to $73.79 per barrel on December 25. Moreover, industry watchers predict a further gain of 0.11% to $73.87 a barrel in the coming market session.
Traders remained cautious as threats of supply route disruptions caused by Houthi maritime attacks remain unsolved. Last week, the US announced the establishment of a multination task force to safeguard Red Sea trade.
Unfortunately, America struggled to recruit members as other nations feared the coalition might escalate tensions. Houthi ramped up attacks on commercial vessels traversing the Suez Canal as retaliation for Israel’s bombardment of Gaza.
Initially, the militant group only targeted ships bearing the Israeli flag. Nevertheless, it began assaulting even oil tankers unaffiliated with Israel in December.
As a result, shippers rerouted their ships to avoid the Red Sea by traveling via the longer South African route. Analysts caution against price hikes when the transporters pass the added freight costs of the more extended travel to consumers.
In addition, taking the longer route extends delivery times, which may lead to temporary shortages.
Meanwhile, the US sustained record-high crude oil production in December, allowing it to fill the gap caused by OPEC+ output cuts. Hence, America has emerged as the new global swing petroleum producer, replacing Saudi Arabia.
Angola Departs OPEC+ in Refusal of Oil Output Cuts
Petrol rebounded following a two-session crash driven by Angola’s departure from the Organization of the Petroleum Exporting Countries and Allies (OPEC+). Angola announced its withdrawal from the bloc on Thursday, set to take effect on January 01 next year.
The Central African nation, which joined OPEC+ in 2007, generated an average of 1.10 million barrels per day (bpd) of crude oil. It contributed 3.93% to the 13-member group’s 28.00 million barrels bpd output.
Economists caution that small South African producers may follow Angola’s lead to dodge their pledges to reduce black gold production. Insiders reported disagreement among members regarding the reduced market share caused by the cuts.
Furthermore, Angola may focus on expanding its crude oil drilling operations free from constraints.
