Cracks in the dam: Oil prices fall after Angola leaves OPEC

<p>Oil prices abruptly fell earlier after Angola announced it was leaving OPEC.</p><p>
"The decision, duly considered, was taken at a session of the Council of Ministers, guided by the President of the Republic, João Lourenço," Angola's oil minister said.</p><p>The fear is that this is a crack in the OPEC dam and the first step towards a breakup of the cartel, something that could release 4 million barrels per day of oil into the market and send prices into the $30s.</p><p>Angola is a decent-sized oil producer, at about 1.1 million barrels per day. However it's unclear why they picked such a big fight with OPEC as they have been unable to maintain production for years.</p><p>The tension started in June when Angola was given a downgrade in its output target for 2024 to 1.28mn b/d, down 175k b/d on its 2023 target. It was further cut at the latest meeting to 1.08 mbpd. Angola wanted 1.18 mbpd and evidently the dispute was enough for them to leave OPEC.</p><p>The potential for maybe another 50k bpd this year is immaterial to the global oil market but but the possibility of a further breakup is certainly higher now and that's why oil fell $1.50.</p><p>More recently, oil has bounced somewhat as traders digest the news.</p>

This article was written by Adam Button at www.forexlive.com.