OPEC affects oil prices mainly by controlling how much oil its members produce. When the group decides to cut production, oil supply goes down and prices usually go up. When they increase production, supply rises and prices may drop. These decisions are made during meetings where member countries agree on production targets. Because OPEC controls a large share of global oil supply, its actions have a strong impact. Even announcements from OPEC can move markets quickly. That’s why traders and governments watch OPEC decisions very closely.
Tags of this article / Finance