in addition to its role in economic development, political and social development, the oil industry plays an important role in the development of the national GDP through the provision of funds for the purpose of investment in the stages of exploration, development and production and subsequent episodes of the oil industry. And the stability of oil prices and the level of fundamental role in achieving these goals, the main topic of this to our article.
To illustrate the impact of oil prices and stability, it is very useful to touch a little bit and briefly the evolution of oil prices, which have passed through the stages percent last year. Where oil trading began at the beginning of the nineteenth century by the international oil companies monopolistic then became OPEC and OAPEC an important role in influencing oil prices in the seventies of the last century, especially in the October 1973 war when the oil-producing Arab countries made a decision to stop the export oil to European countries and the United States, which has provided Israel politically, economically and militarily support during the war, and led to the rise of oil prices to around 11 d / b after what was up 3 d / b. This was the first geopolitical factor affecting oil prices dramatically. This was followed by the rise in oil prices to a record price at the Islamic revolution in Iran, where the price of oil has risen to about 39 d / b, and in the eighties third party affect oil prices represented large the movements in global oil markets income.
Since then The major key influential in Oil prices are OPEC and global markets, but there are several other factors that affect the price of oil, including the development of the supply and demand for oil and global economic growth.
In addition to geopolitical factors and environmental conditions and other factors that it will be indicated in more detail.
The rate of global economic growth is an important indicator in determining the global supply and demand for oil, especially for large economies like the United States and the American group European countries in addition to India, China, Japan and other countries that consume large amounts of oil. In addition, the geopolitical play an influential role in many of the cases, in particular when the price path for political conflicts and unrest or regional political or international crises linked to the major oil-producing areas. Intervention of speculators in the oil and financial institutions, funds and markets play an influential role in the fluctuation of prices, as well as high and low value of the dollar and its relationship to the rest of the currencies being traded currency in the oil market. As well as the weather changes acute Khsol storms freely and relaxes to the shores of the importing countries and their negative impact on the infrastructure of the areas that experienced by including in some cases liquidation facilities also contribute to the effect on oil prices, along with seasonal changes and regular maintenance of the refineries.
And now we return to the question that supposed to be the answer in this article OPEC's decision in the last ministerial meeting in November 2014: Is OPEC abandoned the role of swing producer, and for whom? Is it a long-term strategy or for political motives? It is necessary to point out, starting to targets OPEC to we the main motivations analysis behind OPEC's decision at its last meeting, which led to a price drop substantially, The objectives of the organization is to: work on maximizing revenues member countries by contributing to the stability of fair oil prices and stabilize the market Global oil and maintain the security of oil supplies to consumers at a global level, and strive to ensure and promote the interests of member states in negotiations with the government and international global multilateral organizations and future conventions.
The decisions of OPEC plays an important role in influencing the price decline or rise, and this is what Snodha later. Based on what has been referred to above may be the reasons for the drop in oil prices, analysis during the recent period, and the motives of the organization of its decision in the Ministerial Meeting of the latter and its consequences on prices and on its role and its future.
In order to find out the reasons behind the decision OPEC decision not to cut production in order to support prices. To be a comparison between the organization's decision taken in 2008, by which reduce the production of OECD countries, and between the organization's decision taken in 2014 in which it decided not to reduce production and keep its share in world markets at the level of 30 million barrels a day and left the oil markets controlled prices. Will also show the extent of the impact of these resolutions on global oil prices.
When OPEC made the decision in 2008, the world was going through a recession very significant financial crisis has led to weak demand for oil and thus a quick collapse in world oil prices as the price dropped from $ 147 a barrel in July 2007 for up to $ 34 a barrel in the fourth quarter of 2008, making worried about the continuing decline in oil prices for a long time and the impact on revenue members of the organization decided to reduce output at a rate of 4.200 million barrels per day in the Ministerial Conference Congress, held in January 2008 in Oran-Algeria. As a result of the OPEC countries, its commitment to reduce the quota Oil prices began to recover gradually during the subsequent years as a result of restoring the balance between supply and demand, until it reached prices in the month of June 2014 (US $ 116 per barrel), the British Brent and ($ 106 per barrel) US light crude oil.
The in relation to the conditions of low oil prices in 2014, it is different from the one that was in 2008. Oil prices have begun to gradually decline from $ / barrel 116 for Brent in June 2014 to $ 78 / barrel in 29 v 2 of the same year when the organization held OPEC ministerial meeting, which it decided to keep its production limits at 30 million barrels per day unchanged. As expected, has resulted in the decision to a gradual decline in oil prices to the Brent crude oil price reached $ 45 / barrel at the beginning of 2015 and then returned and rose to 62 d / b last February.
As noted previously, the reasons for the drop in oil prices in the markets the world in the second half of 2014 is different from the reasons that led to the drop in prices in 2008. The question here is you had different circumstances and reasons behind the price collapse a significant impact in the different above-mentioned resolutions? Indicates a change in OPEC policy. Can be the answer to the above question, as shown the following:
It is well known that the organization monitors global oil prices and whenever prices start to fall, and up to an unacceptable degree the result of increased oil supply for the demand forced OPEC to intervene for the purpose of balancing the price by reducing the production of OECD countries in order to restore balance between Supply and demand.
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