Disequilibrium Doesn't Last
I’ve always argued and debated on the side of the proposition that the OPEC cartel cannot possibly manipulate the price of oil. First, raising prices does not mean raising profits, because consumption wanes. Second, there are enough non-OPEC producers and overall producers of energy that any concerted effort on the part of OPEC would be inevitably offset. Yet last week I briefly caved in after reading some opinion somewhere, and started conceding that maybe in the short-medium range the OPEC cartel could indeed raise the price of oil, maybe not in pursuit of profits but instead to get a foreign policy advantage. However, just like a manipulated price, such thought did not last more than a week in my head and was steadily eroded away. So now I’m back to what I’ve always thought. No way.