Harvest Global Markets :

On Friday, oil prices climbed despite Angola’s departure from the Organization of the Petroleum Exporting Countries (OPEC), as the country’s contribution to the cartel’s overall output is relatively small. Crude prices were on track for a positive weekly performance, driven by concerns about supply disruptions in the Red Sea. Angola’s exit had a limited impact on oil prices, with gains on Friday offsetting losses from earlier sessions. Angola’s oil minister stated that the country’s OPEC membership was not in its best interests, following previous objections to OPEC+’s decision to reduce its oil output quota for 2024. The Saudi-led producer group has been seeking to deepen output cuts to bolster oil prices.

Anticipated supply shortages supported crude prices this week, as attacks by the Yemeni Houthi group on vessels in the Red Sea led to oil and shipping companies avoiding the area. These attacks could cause delays in deliveries through the Suez Canal if they persist. Both Brent and WTI futures rose over 3% this week, despite reports of ceasefire talks between Israel and Hamas in Egypt. The conflict between Israel and Hamas has been linked to recent Houthi activity in the Red Sea, with the attacks seen as retaliation for the US vetoing a UN resolution for a ceasefire in the Israel-Hamas war.

The Federal Reserve’s dovish signals provided significant support for oil prices, helping them recover from nearly five-month lows last week as markets welcomed the possibility of lower interest rates in the upcoming year. However, oil prices remained lower for 2023 due to worries about weakening demand in other parts of the world, especially in China, the top importer.

More maritime carriers are avoiding the Red Sea due to Houthi attacks supporting Palestinians, causing disruptions in global trade through the Suez Canal, which handles about 12% of worldwide trade. Companies like Germany’s Hapag-Lloyd and Hong Kong’s OOCL have announced plans to avoid the Red Sea by rerouting or suspending their ships. The US launched a multinational operation to protect commerce in the Red Sea, but the Houthis have stated their intent to continue their attacks.