Does OPEC bring benefits to us???

The greatest example of cartels is OPEC.OPEC  is an organization that is made up of 12 oil-producing countries which operates as a cartel to try to control oil prices.

The goal of OPEC is to control the price of oil for the benefit of the producer.This is done by limiting the production of oil , thus causing a shortage of oil in world markets.OPEC is considered as a price maker because it has a strong effect on the overall oil market.

 

The question is, is OPEC good for us? OPEC limits the world production of oil to push up the price of oil to achieve higher profit. Because of this approach, we need to pay a higher price in order to get oil.

 













“We don’t have to stand by and watch OPEC dictate the price of gas,” says House Judiciary Chairman John Conyers, D-Mich. He think that we can do something about this anti-competitive, anti-consumer behavior.”
 

 

In my opinion, OPEC is bad for us. Because of OPEC has control over the price of oil, it can increase or decrease the price easily.  If OPEC increases the price of the oil ,consumer will need to pay a higher price in order to get oil.This will be a cost to the consumer.

 

 Reference:     http://www.newsmax.com/Newsfront/opec-cartel-illegal/2009/12/12/id/341497 

                                http://oilprice.com/Energy/Oil-Prices/Price-Of-Oil-To-Remain-High-As-OPEC-Limits-World-Production.html