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Unidentified author, 15th January 2003. "Oil price rise despite OPEC increase", Daily News (Tanzania)

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Introduction

Unidentified author, 15th January 2003. "Oil price rise despite OPEC increase", Daily News (Tanzania) The article appeared in the "Daily News" on Wednesday 15th January, 2003. It describes how prices of oil have risen despite an agreement by Cartel OPEC to boost output. The main cause of this increase is due to a "cut in production in Venezuela and the possibility of a war with Iraq". Like any other commodity the prices of oil is controlled by supply and demand. ...read more.

Middle

It is essential to the welfare of the industrialized world and it impacts the cost of transport, the cost of goods, services and the availability of many products including food, water and shelter. The price of oil has increased due to the supply of oil decreasing in the International market while the demand for it is increasing. A vast majority of the population will be affected by the increase of the price as there is a high demand for oil and there is no competing substitute to replace it. ...read more.

Conclusion

Despite this pessimism of oil price increasing, theoretically the developing countries that produce oil will benefit from the price rise. This is due to the fact that their economy will improve as more money will come in to the country and foreign earnings will increase. All in all the OPEC countries should increase the supply of oil in order to make the price stable, so that demand and supply are equal bringing an equilibrium price to the goods so that consumers will not suffer and the global economy will not be threatened by the price rise. ...read more.

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