kk..ya i just wondering if any of you know any major reasons for this. I know one can be something like scarcity (hurricane n war in Iraq)...what other reasons are there for the rise in prices?Economics essay....3 sub point needed for ';Rise of Oil Prices: Causes and Justifications';?
Socialism. Specifically, rises in oil prices are often caused by the members of OPEC jointly agreeing to reduce production, so as to increase oil prices, and maximize their own profit. This group is called a cartel. When private companies engage in cartel action, it is usually illegal.
OPEC, however, is not illegal, because it consists of the state-owned oil companies of 11 oil producing nations. Therefore, it is a group of governments themselves that are engaging in cartel pricing, and there is no overarching law against that.Economics essay....3 sub point needed for ';Rise of Oil Prices: Causes and Justifications';?
Manipulation of supply is the key reason for price increases. Countries and companies involved in the supply chain restrict supply in order to increase prices.
Political posturing is another major reason. Prices rise and fall to promote government policies.
The development of many countries in the world has created increased demand for oil.
Ok so what you said in the question is wrong. Hurricans and Wars are negative shockes to the economy, thats one. The other one is scarcity, where supply start to run low, thats two, and an increase in the demand for gas, like when everyone drives during christmass, or summer.
O-ya, and if your asking this for an economics class, I suggest that you don't put the other answers those two people said. I not saying they are wrong or right, its just that their are not economic pricipals involved.
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