Kamil - Proposal

This research paper will examine OPEC and its relationship to oil prices. In contrast to the belief that OPEC sets oil prices, it is the production of OPEC and the limits it sets on production that, along with other factors, plays a major role in the price of oil. When people hear that oil has reached $60, $70 a barrel, and blame the Arab nations of the Middle East, often they are not aware that there are many, many factors that go into the price of gas. In the paper I would like to explore how the production of oil plays a large role in oil prices, discuss additional factors that play a role in oil prices, and clarify the true role of OPEC. Moreover, in dissecting how gasoline is priced, such as the cost of oil to the cost of marketing, I seek to show that overall OPEC has a very small role in oil and gas prices. The paper will discuss what efforts OPEC undertakes as a means of ensuring that oil prices stay stable and how, when the organization claims to try and keep stability in the oil market that the prices go through periods of major fluctuations as seen in the last several years.