OPEC! A major influence...

One group that I have not mentioned that is very instrumental in all of this is OPEC (Organization of the Petrolium Exporting Countries).

One of OPEC's goals is to stabilize oil prices, which they claim creates "an efficient, economic & regular supply of petroleum to consumers, a steady income to producers & a fair return on capital to those investing in the petroleum industry. " This has caused many companies, advocacy groups and individuals to question OPEC's actions of whether they are for the better or for the worse.

OPEC can cut supply of oil exports if they feel (1) that the prices are too low (2) or the inventory levels are at a level in which will force the price to retreat. "This measure was aimed at arresting the declining prices of crude oil in the international market." (Business Day Online, October 30, 2006)

With OPEC controlling the output and export of oil from it's governed countries, it could cause further development into countries not tied to OPEC or for increased investments into alternative energy. "High oil prices may mean opportunities for oil and gas investment in more difficult operational environments. It may also point to opportunities in non-OPEC countries or in the field of alternative energy or conservation technologies." (Smith Brandon International Online)

While OPEC helps its' governed countries, it can hurt the general economy of many others as people are forced to pay more for gasoline and other sources of fossil fuels. This will reduce how much money is pumped into the general economy thus stemming growth until prices retreat.

Even as of late, with oil prices in the mid $60 range, OPEC stated that there is an adequate supply of oil in the market and will not increase output ahead of its' next meeting in September. World Business News In fact, The Standard reported on June 11, 2007 that due to an increase demand for gasoline and tropical storm threats could push oil prices to $80 a barrel this summer. This would definitely cause even more backlash from consumers as the oil companies and countries would continue to fuel their financial coffers with profits while the consumers have to either invest in alternative energy or reduce their discretionary spending.

Coming up next: Conclusion on the parties who are in play and their role. To be posted tomorrow, June 13, 2007.