Something That May Only Interest Me. Oct 28 2011
Term of the Day – OPEC. OPEC, which stands for “The Organisation of the Petroleum Exporting Countries” is an intergovernmental organisation made up of 13 oil producing nations.
OPEC member nations currently supply about 40% of the world’s crude oil and 16% of its natural gas. OPEC nations possess about 79% of the world’s total proven crude oil reserves and 44% of the world’s crude oil production.
This means that OPEC effectively seeks to operate as a cartel, determining supply so as to keep prices – and profits – high. However in practice this isn’t so easy, as exemplified by the demand-side shock in 2008 that saw oil prices plummet from a record high of US$147 to just over US$30 a barrel.