ORGANIZATION OF PETROLEUM

EXPORTING COUNTRIES (OPEC)

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OPEC was created in 1960, and its original goals were the unification of the petroleum policies of the countries that make up the group to stabilize oil prices and ensure better income producing countries. They have established various resolution that over the years have tried to be fully implemented by members such as maintaining stable oil prices, eliminate sales discounts and a mechanism for controlling the devaluation of the dollar, among others. (Balestrini C, 1991).

The following chart price action of oil shown throughout this year:

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The chart shows that the price of a barrel of oil started to decline since late June. This phenomenon indicates an increase in the price of the dollar due to a lower amount of foreign exchange.  (investing.com español, 2016). Rising dollar also affects our business as producers of our raw material import some products used for cultivation and this increases their cost and therefore ours, because they increase the prices of our inputs. (eltiempo.com, 1997).

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The price of oil currently tends to increase considerably and makes the price of the dollar decreases.

To conclude, the change in oil prices affects our company in obtaining imported raw materials and also in transporting them, as they are linked to the price of gasoline and trucking.

Balestrini C, C. (1991). Economía y política petrolera. Caracas: Academia Nacional de Ciencias Económicas.

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BIBLIOGRAPHY

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investing.com Español. (2016). Petróleo crudo Gráfico - Investing.com. [online] Available at: http://es.investing.com/commodities/crude-oil-streaming-chart [Accessed 14 Aug. 2016].

 

eltiempo.com. (1997). EL DÓLAR Y SUS EFECTOS ECONÓMICOS - Archivo Digital de Noticias de Colombia y el Mundo desde 1.990 - eltiempo.com. [online] Available at: http://www.eltiempo.com/archivo/documento/MAM-643458 [Accessed 14 Aug. 2016].