2006-10-19 07:58:59 · 6 answers · asked by Claudio F 1 in Business & Finance ➔ Investing
OPEC is the cartel of the Oil Producing and Exporting Countries and every few months the representatives of these countries get together to decide what each country's quota (or production target) will be for the next few months. For most of the countries, their oil industry is nationalized and part of their government, and for many of them the oil is literally the only resource they have that can be exported for foreign exchange currency.
The purpose of having the cartel is so the countries can cooperate to control the price paid to them by the world market. This is actually more complicated than it might seem. They would like the price to be high enough that it is worth the time and effort to get the oil out of the ground and export it (the men must be paid and the pipelines guarded, etc), but not so high that everyone starts to junk their SUV's and jog to work (or even worse, the world economy slows down and the demand for oil decreases!).
Each country has a certain capacity of oil they are able to produce in a given time based on their level of mechanization, the size of their oil fields, their access to transportation, etc. By sticking to a quota, each of the countries believes they can have a proportionally fair share of the world oil income.
I hope this helps.
2006-10-19 08:17:18 · answer #1 · answered by sdvwallingford 6 · 2⤊ 0⤋
OPEC nations meet periodically to reach agreement on the total number of barrels of oil they collectively will produce daily.
Then they agree on the number of barrels each member nation will produce each day. That's the Quota.
Then some of these members will go home and exceed their quotas.
2006-10-19 17:48:28 · answer #2 · answered by ? 6 · 0⤊ 0⤋
It's the target level of oil production set by OPEC. Currently about 28 million barrels of oil a day. The 11 members of OPEC are responsible for about 40% of the world's oil production and account for about 2/3rd of the worlds proven reserves.
2006-10-19 15:13:48 · answer #3 · answered by henry9tx8 2 · 0⤊ 0⤋
The quota is the max number of gallons of oil produced. Therefor cutting this amount means lees oil production, thereby raising prices of fuel.
2006-10-19 15:07:10 · answer #4 · answered by Scooby 3 · 0⤊ 0⤋
As of 7/1/05 it is 28 million barrels a day by OPEC 10 which does not include Iraq.
2006-10-19 15:11:40 · answer #5 · answered by EAA Duro 3 · 0⤊ 0⤋
Its part of the Bush/Muslim system of baffling the world community.
2006-10-19 15:03:13 · answer #6 · answered by Anonymous · 0⤊ 3⤋