© Reuters.Investing.com-- Oil prices rose on Friday as markets looked past Angola’s exit from the Organization of Petroleum Exporting Countries, given that the country accounted for only a small portion of overall output by the cartel.
Crude prices were set for a positive weekly finish, buoyed by the prospect of supply shortages due to disruptions to shipping in the Red Sea.
Oil prices fell on Thursday after Angola said it will leave the OPEC, with the move raising concerns over the cartel’s unity as a group, as well as its ability to further support crude prices in the coming year with production cuts.
But Angola still accounted for a relatively small portion of the cartel’s overall output- about 1.1 million barrels per day (bpd) out of 28 million bpd produced by the whole group. This notion limited the overall impact on oil prices from the country’s exit, with Friday's gains largely offsetting losses in the prior session.
Brazil is set to join the OPEC+ in 2024, and produces over 3 million bpd.
expiring in February rose 0.5% to $79.85 a barrel, while rose 0.5% to $74.52 a barrel by 20:46 ET (01:46 GMT).
Red Sea tensions put crude on course for weekly gain
Expectations of supply shortages were a key point of support for crude this week, as attacks by the Iran-aligned Yemeni Houthi group on vessels in the Red Sea saw several oil and shipping firms steer clear of the area.
The move points to potential delays in deliveries arriving through the Suez Canal, especially if the disruptions persist for more than a few weeks.
and WTI futures were both up over 3% this week, even as reports suggested that Israel and Hamas were meeting for ceasefire talks in Egypt. The conflict is at the heart of recent Houthi activity in the Red Sea, with the latest attacks coming in retaliation for the U.S. veto of a United Nations resolution for a ceasefire in the Israel-Hamas war.
US data offers mixed signals, but demand outlook upbeat
Key economic readings from the U.S. offered mixed cues to oil markets this week. While an unexpected build in pointed to well-supplied markets in the world’s biggest fuel consumer, relatively showed that economic growth in the country remained robust.
Third-quarter U.S. GDP data was revised a touch lower on Thursday. But the reading still remained well in expansion. It also contrasted signals from other developed countries, which are struggling with slowing economic growth.
The GDP reading ramped up hopes for a “soft landing” for the U.S. economy, which could keep oil demand upbeat in the coming year.
Focus is now on data- the Federal Reserve’s preferred inflation gauge- due later in the day, for more cues on the central bank’s plans to begin trimming interest rates in 2024.
Dovish signals from the Fed were a key point of support for oil prices, enabling them to rebound from near five-month lows last week as markets cheered the prospect of lower rates in the coming year.
But oil prices were still trading lower for 2023, hit concerns over deteriorating demand in the rest of the globe, particularly top importer China.
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December 22, 2023 at 09:03AM
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Oil prices rise past Angola's OPEC exit; Red Sea tensions bring weekly gain By Investing.com - Investing.com
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