OPEC's fault?

Question

I read somewhere that OPEC is not completely responisble for setting the price on crude pertoleum.If that's true who else is involved in setting the price?

Answer 1

The oil in tanks and the oil in the field and the oil under ground is sold by brokers and the big oil dealers keep buying because hey see a profit in the near future.

buy low sell high.

Some loose but the overall picture there is profit to be made in the oil market from this action by deep pocket profiteers.

The oil companies are the big profiteers because they hold both ends of the rope.

OPEC is not anymore holding the  big  portion of oil production. So it is only a game of propaganda and the best to blame is OPEC.

When the Dollar is at half it's value than the baril of oil need to be at double the price it was few months ago.

That's why oil is nearing $150.

OPEC is actually receiving half the value for a depreciated Dollar.

Now the Dollar is loosing value mainly because Mr. Bush is  borrowing to finance his War.

Answer 2

The other factor is the stock market.  People buying stock in oil drive up the price and the higher the price goes the more money people make and the more stock get's bought.  When it does finally come down it's going to come down hard and fast because people will want to make as much money on it as possible and that means selling high.

Answer 3

OPEC doesn't set the price of oil they set their own member nation's production levels.  So they account for about 2/3 of the world's total proven reserves and out of that 1/3 of production.  Which is enough market power to keep the price high should they think that's in their interests.  Their mandate is to strike a balance that affords them the most profit, so combine demand with price.  Considering demand is very inelastic they can take the price very high while still selling large amounts.

Other major producers include former Soviet nations, Norway, Canada, Mexico, and the U.S..