GK
BUSINESS ECONOMICS
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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prices would not change
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oil prices would probably rise
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oil prices would probably decline
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the price for substitute products would decline
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Detailed explanation-1: -How OPEC oil cut would affect world? The rule of demand and supply will kick in, which says that when supply is lesser than demand, prices rise. So prices of fuel will rise. Prices have already started to rise.
Detailed explanation-2: -Because of this market share, OPEC’s actions have a huge influence on international oil prices. In particular, OPEC’s largest producer of crude oil, Saudi Arabia, has the most frequent effect on oil prices. Historically, crude oil prices have seen increases in times when OPEC production targets are reduced.
Detailed explanation-3: -Experts Expect Gas Prices to Jump 15-30 Cents Per Gallon OPEC’s decision to cut production, scheduled to start in November, is expected to cause gas prices at the pump to jump again.
Detailed explanation-4: -"OPEC+ tailors supply and demand to balance the market, ‘’ Kate Dourian of UK industry body the Energy Institute told the BBC. “They keep prices high by lowering supplies when the demand for oil slumps.” The group can also lower prices by pumping more oil into the market.
Detailed explanation-5: -CAPE TOWN, Oct 18 (Reuters)-The OPEC+ oil producers group moved unanimously to cut output to prevent a crisis and stem a tide of volatility, OPEC’s secretary-general told an energy conference in South Africa on Tuesday.