Opec: The oil cartel in profile

Another good BBC article on OPEC - the Oil cartel.  

Opec agrees record oil output cut

This BBC article covers yesterdays announcement by OPEC that its cartel will cut its supply of oil by 2.2 million barrels per day starting in January 2009.

This decision has been made to try and increase the price of oil from its current price of under $50 per barrel. (Remember that oil was priced at nearly $150 per barrel just 6 months ago in July 2008!)

Q) Read the article and explain why, despite the announcement, the price of oil fell to under $40 per barrel yesterday.

What is going on in the oil market?

Scan the following BBC articles and answer the questions to learn more about OPEC and the causes of recent changes in the price of oil.

27/10/08 What is going on in the oil market?
Q1a) The article describes OPEC as a ‘cartel’ – what is a cartel?
Q1b) Oil has fallen from $147 per barrel in July 2008 to $43.67 by early December 2008. What reasons does the article identify for this huge fall in price?

20/10/08 Profile: Opec
2a) What does OPEC stand for?
2b) Why was OPEC set up?
2c) How much of the worlds oil does OPEC produce?
2d) How much of the worlds oil reserves are held by OPE C member countries?
2e) Identify 4 countries that are part of OPEC
2f) What are OPECS stated aims?

05/12/08 Oil falls sharply on big job cuts
Q3a) The article make a connection between the price of oil and the current economic situation. Use a suitable diagram to show this connection

08/12/08 Oil prices up on talk of Opec cut
Q4a) Use a suitable diagram to show the effect of an OPEC cut in production on the price of oil