OPEC

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vardhanvishnug

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OPEC (Organization for Petroleum Exporting Countries) controls the supplies of oil in the world and indirectly controls the oil prices.
How far is it right for OPEC to control the oil prices indirectly?
 
As in any economy, major decisions are taken by the parties in majority, OPEC is an association of petroleum exporting countries accounts for 90% of pteroluem supplied over the world, has the right to influnce the prices
 
OPEC’s Long-Term Strategy provides a coherent framework and consistent vision for the future of the Organization. The culmination of more than two years of preparation, the Strategy is prepared every five years by the OPEC Secretariat under the guidance of the Deputy Ministers of Petroleum and Energy of Member Countries.
 
The IEA has apparently calculated that OPEC earned 575 billion (U.S.) dollars in oil export revenues in 2009, a relatively depressed year, and might earn more than 700 billion this year.
 
OPEC controls gas prices by either increasing or decreasing the amount of oil available. If the amount available goes down, the prices go up. This is the law of supply and demand. OPEC may choose to lower their available inventory by slowing down production or by putting more of the oil produced into reserves. To increase the amount of oil available, the members of OPEC would begin to produce more oil, or open up their reserves as inventory.

The purpose of OPEC is to try preventing any sudden, extreme changes in gas prices. If one country is not producing as much oil as normal, they have other countries pick up the slack to stabilize the market. They are responsible for keeping the gas prices from falling too low, normally trying to avoid prices of below $50 US Dollars a barrel.
 
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