Angola Halts Oil's Winning Streak, Reduces OPEC Membership to 12

Meanwhile, Harbour Energy acquires Wintershall's assets for $11 billion: File Image/Pixabay

Angola on Thursday announcing that it would leave the Organization of the Petroleum Exporting Countries (OPEC) was enough to break oil's tepid winning streak, with two key benchmarks settling down minimally.

Brent settled down 31 cents to $79.39 per barrel, and West Texas Intermediate settled down 33 cents to $73.89.

Diamantino Azevedo, oil minister for Angola, said OPEC was no longer serving his country's interests, an unsurprising comment in light of Angola being one of several countries that recently protested its cut in output quotas.

Over the past decade Ecuador and Qatar have also renounced their memberships to the cartel, and the latest departure shrinks OPEC's total membership to 12 nations.

Helima Croft, head of commodities research at RBC Capital Markets, said, "The seeds of this exit were laid in June," referring to Angola walking out on the OPEC meeting that sought to achieve consensus on its latest round of production cuts.

Croft went on to note that "In addition, Angola has been one of the moodier members, having staged multiple meeting walkouts in recent years at the secretariat."

Meanwhile, the main driver of oil trading this week – vessel attacks on the Red Sea – took a back seat but could rekindle in light of promises by the Iran-backed Houthi militant group warning it would retaliate if the U.S. carries out attacks on its bases in Yemen.

Over 100 container ships are currently taking the long route around Africa to avoid drone attacks from the Houthi, and in response to a maritime task force announced by Washington to deal with the problem, Tamas Varga, analyst at PVM Oil Associates Ltd., said, "Until the naval coalition" eventually "shows its teeth, the Red Sea situation will continue to have an outsize influence on oil players' thinking."

In other oil news on Thursday, the UK's Harbour Energy announced it had struck an $11 billion deal with BASF and LetterOne to buy almost all of Wintershall Dea's upstream assets.

The deal includes upstream assets in Algeria, Argentina, Denmark, Egypt, Germany, Libya, Mexico, and Norway, as well as Wintershall's carbon dioxide capture and storage licenses in Europe – but not the firm's assets in Russia, which are being transferred to Russian firms.

Harbour stated that the deal will make it "one of the world's largest and most geographically diverse independent oil and gas companies."