Monday, December 21, 2009
Response to Blog Post #6
The information I used to write this post was retrieved from a reliable source (BBC News). The information in the article that I read on their site was very helpful. I was able to reflect strongly enough to produce an intermediate blog post.
Blog Post #6
In the world right now OPEC supplies a little over 35% of the worlds crude oils. And well over 70% of refined oils. Immediately following the last meeting of its members, OPEC, raised oil prices to close to $74 per barrel of oil.
Essentially, OPEC members agreed to robustly raise prices while still maintaining the same export rate of oil. Oil is bought with dollars, meaning that if the U.S. currency fails then the other major conusmers of oil that are using different currency's (such as the euro) will see a price drop for them.
Even though oil supplies/extraction is at an all time high OPEC still played the position of a government and placed basically a tariff on oil exchanges. Limiting how much each member can extract/export. This is an efficient strategy at pulling in more profit and stimulating their own country/state.
Essentially, OPEC members agreed to robustly raise prices while still maintaining the same export rate of oil. Oil is bought with dollars, meaning that if the U.S. currency fails then the other major conusmers of oil that are using different currency's (such as the euro) will see a price drop for them.
Even though oil supplies/extraction is at an all time high OPEC still played the position of a government and placed basically a tariff on oil exchanges. Limiting how much each member can extract/export. This is an efficient strategy at pulling in more profit and stimulating their own country/state.
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