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OPEC, formally known as the Organization of Petroleum Exporting Countries, strikes attention to many Americans and economists. OPEC controls our nation’s oil supply. Recently, because of their inability to supply an adequate amount of oil to our country the price of crude oil has risen to as much, if not more, than thirty dollars a barrel. An article published by the Wall Street Journal on November 14, 2000, states that OPEC does not plan to increase supply because they are comfortable with the price increase.
OPEC Secretary General Rilwanu Lukman states that OPEC does not eel as though crude oil at thirty dollars a barrel is causing problems in the international economy. At first, OPEC stated that it would only want to see oil sold at twenty-eight dollars a barrel, but now their position has changed. This change came despite many warnings from analysts around the world. These analysts felt that such high prices for oil could be dangerous to the economy in the future. (See analysis below)
The article also brings up the idea that prices will fall as the annual season drop-off in oil demand kicks in. As winter turns into spring the demand for oil will drop, forcing prices to spiral downward. To ward off the drop in prices, the article states that OPEC will trim production costs. Further on in the article, OPEC counters by blaming others for the cost hike. This doesn’t make sense, because they are clearly at fault. They are taking advantage of the fact, that we need oil, and we will pay high costs for that oil.
OPEC is the basic story of supply and demand. OPEC controls our nations oil supply; it directly effects demand and price. Right now, the supply curve is shifted to the left indicating a minimal supply. This decreased supply is the whole reason for out high prices today.
The article states that thirty-dollar oil is not creating a hardship. This is because oil prices are inelastic...

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