Financial Times  Sep 14  Comment 
Strategy of keeping the taps open and squeezing non-member oil producers shows signs of working
Financial Times  Sep 8  Comment 
Readmission to oil cartel will help Jakarta win competitive deals as its output falls, say analysts
Financial Times  Aug 25  Comment 
Tussle over market share within group is intensifying ahead of lifting of sanctions
The Times of India  Aug 23  Comment 
Iran's oil minister, Bijan Zanganeh, said on Sunday that holding an Opec emergency meeting may be "effective" to stop the oil price slump, Iran's oil ministry news agency Shana reported.
Financial Times  Aug 11  Comment 
Supply from US shale and non-Opec countries more resilient than initially expected
The Times of India  Jul 13  Comment 
The global oil market should be more balanced next year as China and the developing world increase oil consumption while supply of shale oil from North America and other regions grows more slowly, Opec said on Monday.
Financial Times  Jun 12  Comment 
It is still too early to tell how many key factors will play out, says Anjli Raval
OilVoice  Jun 8  Comment 
The price of Brent crude oil fell Friday as the Organisation of Petroleum Exporting Countries Opec has committed to maintaining production at current levels with commentators citing concerns around
The Times of India  Jun 8  Comment 
Oil prices fell in Asia today after Opec decided to maintain its high output levels, while traders were also weighing the possible return of Iranian supplies that have been curtailed by international sanctions against Tehran, analysts said.
guardian.co.uk  Jun 5  Comment 
Saudi oil minister Ali al-Naimi, who wants to target US shale producers, claims latest Opec meeting was ‘amicable’ despite some exporters seeking higher prices Saudi Arabia has bulldozed fellow members of the Opec oil cartel to hold...


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OPEC stands for the Organization of the Petroleum Exporting Countries, an international cartel consisting of Iraq, Indonesia, Iran, Kuwait, Libya, Angola, Algeria, Nigeria, Qatar, Saudi Arabia, the United Arab Emirates, and Venezuela. Prospective members include Bolivia, Canada, Sudan and Syria who have been inivted by OPEC to join. The recent discovery of a sizeable oil field in the South Atlantic supports Brazil's possible application. The organization is based in Vienna and controls over 40% of the world's total oil production, and its member nations account for over 60% of the world's estimated oil reserves. Although OPEC is slowly beginning to lose control over crude oil prices, its holdings still give it a large amount of weight in price determination.

Brief Economics of OPEC

Why was OPEC formed in the first place? What gave OPEC the power to hit the news with their every decision, and what do they have to gain?

Unlike competitive industries such as garment production, oil production belongs to what is known as an Oligopoly, in which only a few producers produce most of the output. Businesses or Nations in an oligopoly produce almost the same thing and sell it at a price determined by demand and the overall supply of all the producers. However, in order to maximize profit return on every unit of output (hence economic profit), businesses in an oligopoly need to collude and reduce output together so that prices rise and overall revenue rises. How does overall revenue rise when demand should naturally drop on higher prices? Well, the problem is that the demand for oil all over the world is fairly inelastic, which means that the drop in demand is lower than the rise in price! They would rather sell one unit at $100 then 2 units at $45 each.

So, that is what OPEC does and why it exists. OPEC nations are in an oligopolistic industry trying to maximize profits through production collusion. In a free market, collusion is naturally illegal (hence a cartel) but who is to control NATIONS forming a cartel?

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