59
Keeping
the market
supplied
T
hroughout its 50-year history,
OPEC has seen periods of both
extremely high and low oil prices. Each
time OPEC has tried to respond in an
appropriate manner.
OPEC does this by coordinating the oil
policies of its Member Countries.
If demand suddenly grows and supplies
fall short, OPEC can increase its oil
production in order to keep the market
well supplied. On the other hand, if
demand suddenly falls and supplies grow,
OPEC can slow down production in
order to help maintain a balance in the
market.
OPEC’s actions at critical times have
demonstrated the Organization’s ability
to keep the oil market well-supplied
during different kinds of unexpected
events, such as wars or natural disasters.
Stabilizing
oil markets
O
ne of the most important parts of
OPEC’s mission is making sure
that the oil markets remain stable. One
way that OPEC tries to do this is by
working to avoid price extremes (when
oil prices are too low or too high).
Avoiding price extremes—and sudden
changes in prices—is important for
producers and consumers. When oil
prices are too high or too low, problems
can be generated for the global economy.
For example, with extremely high oil
prices, it costs more to do things—like
run a car, operate a machine or make
products like plastics.
But extremely low oil prices also cause
problems. If the price of crude oil is
too low, then it doesn’t make sense to
spend money trying to find more oil.
Investments in projects may then fall.
157th Meeting of the OPEC Conference in session in Vienna, Austria, October 2010.
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