Oil prices fall after Angola withdraws from OPEC.

Angola's decision to leave the Organization of Petroleum Exporting Countries (OPEC) cartel drops oil prices by more than 1%.

Maquento Domingos

Brent crude, the benchmark European oil futures contract, fell 1.1%, while US West Texas Intermediate crude fell 1.2%. The United States Oil Fund (NYSE:USO), an exchange-traded fund that tracks the price of light oil, fell 0.2% in the early afternoon of Thursday in New York following the news of Angola's withdrawal from OPEC.

Angola has been a member of OPEC since 2006, and currently produces around 1.1 million barrels per day of OPEC's total 28 million b/d, but the country feels that being a member of OPEC is no longer in its interests.

The country gains nothing by remaining in the organization and, in defense of its interests, decided to leave, explained Diamantino Pedro de Azevedo, Angolan Minister of Mineral Resources, Oil and Gas.

African nations' dispute with OPEC, both Angola and Nigeria was over their production quotas, which they found unreasonable compared to the rest of the group, although neither can compete with countries like Saudi Arabia or the United Arab Emirates, and found that the cartel should allow them higher quotas.

However, BGH commodities investor Alexander Stahel, "Expect the UAE to increase its quotas now. Additionally, we will monitor Nigeria," he stressed.

OPEC policies also control production, more specifically the amount of oil produced and entered into the market (supply). Therefore, due to the way it operates, OPEC is often described as a cartel, he said.