Should OPEC be allowed to cut supply to raise the raise the price of oil?

First I just want to say if I'm incorrect in my understanding of how this works I would really appreciate being corrected by someone who can explain this fully and accurately.





i heard on the news that OPEC is getting together to discuss cutting output to lower supply so that the price of oil goes up.


If we have to deal with the fluctuations of the market impacting the price we pay for gas, why do they have the ability to make us pay more?


Should OPEC be allowed to cut supply to raise the raise the price of oil?
As Christopher above alludes to, if OPEC consisted of private companies then their cartel price-fixing scheme would be highly illegal everywhere, and their executives would be arrested and thrown in jail.





However, OPEC consists not of private companies, but of the socialist state oil enterprises of 11 countries, colluding as sovereign nations.





Short of dropping bombs on them, there is no overarching authority to prevent them from doing what they want. However, you should also understand that our best weapon is their own greed. They each agree to quotas to limit production, but then they usually cheat on the quotas to make more money, and the cartel discipline breaks down as they flood the market with oil. That's what happens about 95% of the time.Should OPEC be allowed to cut supply to raise the raise the price of oil?
OPEC is cartel, much like a drug cartel. Although there are international anti-trust laws that forbid price fixing, OPEC has a loophole as a collection of sovereign states.





';As its name suggests, OPEC is organized by sovereign states. It cannot be held to antitrust enforcement in other jurisdictions by virtue of the doctrine of state immunity under public international law. However, members of the group do frequently break rank to increase production quotas.';





http://en.wikipedia.org/wiki/Cartel
OPEC represents 11 (I think) oil producing nations. This means it is their oil.





They therefore have the right to sell it or not.





You in turn have the right to buy it or not.
The same reason you would have pricing leverage if you owned all the car dealerships in town.