Brent, West Texas and OPEC: What are and what they tell us?
| Date: December 7, 2008 | Source: Economic @ 21 |
| Category: ECONO-CONCEPTS | |
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Loading ... Brent and West Texas are types of oil which, without going into details of chemical compounds, the important thing is that economically summarize the two main types of extractions and marking prices in the markets.
In the case of Brent, extracted mainly from the North Sea, and which refer to the European markets, while West Texas Intermediate is extracted mainly from the fields of Texas and are taken as benchmark oil prices USA.
The currency in which it is listed both on the dollar, due to globalization, although the composition of the two is not exactly the same, typically priced at similar prices.
Large numbers of the final products depend on oil consumption as raw material, so a rise or fall in demand for products affects oil demand and thus to increases and decreases in oil reserves.
As need to bring order to the oil industry and maintain fair prices while avoiding the waste of a good with limited resources comes the Organization of Petroleum Exporting Countries ( OPEC ), international economic organization created in response to lower prices oil official agreed unilaterally by large distribution companies in August 1960.
The statutes of the OPEC say their goal is to coordinate and unify petroleum policies among member countries, "in order to ensure fair and stable prices for petroleum producers, providing efficient, economic and regular oil to countries consumers and a fair return on equity for investors. "
The OPEC can have a major influence on the oil market, especially if you decide to reduce or increase its level of production. It controls about 43% of global oil production and 75% of oil reserves. Its dominance in oil exports is around 51%. In addition, it concentrates all the spare capacity of oil production in the world, which, de facto, makes the central bank OPEC in the oil market.
If we assume a constant production X at a price and a drop in oil consumption will cause oil reserves increase, so its price would be affected down to try to find the exit and minorar reserves, as an excessive increase in reserves would generate large costs of maintaining them and the consequent waste of overproduction. Following the OPEC could decide to lower production to adjust to demand, which would lower reserves and may therefore contain prices until marginal level (equilibrium price compared to costs for production, storage and distribution).
Therefore, OPEC is responsible for regulating the oil prices are the righteous, complementary to these, the National Energy Commission (CNE) is responsible for ensuring that these prices are passed on to final consumers fairly, as we talked of this Article: CNE. What is and what their missions? .
December 17, 2008 at 22:26
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