Answer:
The OPEC member countries control a large percentage of the world's oil production which gives them a lot of power to affect world oil prices.
Explanation:
OPEC with a total number of 14 members at present produces about 40 percent of the world's crude oil. Therefore, OPEC actions do affect international oil prices because of the size of the market share the collective controls. However, there are also oil sources beyond the OPEC states. For example, Brent Crude refers to oil that is produced in the Brent oil fields and other sites in the North Sea. WTI is the benchmark crude for North America. WTI is better suited to the production of gasoline while Brent oil favors diesel fuel production. Because together OPEC holds three-quarters of the world's conventional oil reserves and has the world's lowest barrel production costs, it can influence world oil prices and supply by deciding to either produce more or less barrels. If OPEC lowers production the price of oil increases because Brent and WTI have to make up the difference, and their production prices are higher. However, OPEC's ability to affect prices is changing with Canada, China, Russia and the United States increasing their own output in recent years.
