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Angola, Africa's second-largest oil producer, will withdraw from the Organization of the Petroleum Exporting Countries (OPEC), Angola's Minister of Mineral Resources, Oil and Gas, Diamantino Pedro Azevedo, announced on Thursday (21 December), state media outlet Jornal de Angola. Azevedo says our role in the organization doesn't make sense. This is not an easy decision to make. The time has come.
Angola's refusal to accept the cut in production quotas at the June OPEC+ meeting led to the postponement of the November OPEC+ meeting, but the country still failed to raise its production target. As of October, Angola produced less than its 2024 quota, according to an assessment by independent sources cited by OPEC.
Angola's decision to withdraw from OPEC was taken at a cabinet meeting and approved by the president, the Angolan presidential palace said. Angola's governor to OPEC, Estevao Pedro, said that Angola is not satisfied with its production target for 2024 and does not intend to stick to it. Angola's withdrawal will reduce OPEC's membership to 12. Led by Saudi Arabia, OPEC and its allies have been reining in supply to prop up flagging oil prices.
Affected by the above news, WTI crude oil and Brent crude oil continued to decline, falling 2% during the day, at $72.61 / barrel and $78.02 / barrel respectively.
- Global crude oil production
Judging from the crude oil production data of the Global Organization of the Petroleum Exporting Countries OPEC, the overall fluctuation from 2015 to 2019 was in a state of slight fluctuations, close to 33,000 thousand barrels per day in October 2018, and since 2020, affected by the global new crown epidemic outbreak, macroeconomic downturn, new energy substitution and other comprehensive factors, crude oil production has declined sharply, and then with the gradual recovery of the epidemic and the economy, crude oil production has rebounded, as of January 2023, it is still below 29,000 thousand barrels per day.
-- Global crude oil shipments
Global demand for crude oil transportation has improved. According to the Ministry of Transport's "2022 Waterway Transport Market Development and 2023 Market Outlook", as of December 2022, the global crude oil shipping volume was about 1.953 billion tons, an increase of 5.1% year-on-year, and basically recovered to the level of 2019.
-- Global crude oil capacity
Global crude oil capacity fluctuated, and freight rates rebounded at the bottom. In terms of capacity, at the end of 2022, there were 5,574 global oil tankers (more than 10,000 tons) with 634 million deadweight tons, down 2.8% from the beginning of the year. With the increase of global oil supply risks, and the impact of some countries' policies to control the rise in oil prices to fight inflation, the freight rate of the crude oil spot transportation market has risen significantly.
-- Global crude oil price trends
Since 2022, coal and natural gas have risen by more than 200%. Even since Putin announced the special military operation on February 24, the increase has exceeded 100%, while Brent oil and WTI crude oil have risen by 25% and 21%, respectively, during the same period. Based on Russia's important energy position in the global market, once the sanctions imposed by Europe and the United States on Russia's energy sector are implemented, it means that nearly one-third of the world's oil and gas supply will be interrupted, and the impact on the global energy market is self-evident, especially in Europe, where there may be another energy crisis.
Wall Street forecasters believe there is some room for oil prices to recover next year, although it may not rebound significantly. The average forecast of the five major banks for Brent crude in 2024 is around $85 per barrel, while the international crude benchmark is currently trading at $77 per barrel. Citi's forecast of $75 per barrel was the lowest, while Goldman Sachs' forecast of $92 per barrel was the highest.
Global oil demand is widely expected to grow further next year from this year's record levels. Goldman Sachs is the most bullish. The agency expects global oil demand to increase by 1.6 million b/d next year and expects core OPEC members to tightly control supply. Analysts led by Daan Struyven said this would create a "modest supply gap" in global markets and keep oil prices in the range of $80 to $100 a barrel.
Note: This article is for content purposes only and does not constitute any investment advice.
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