OPEC & Oil Prices

["Canova, Timothy" <CANOVA@xxxxxxxxxxxxx>]

The OPEC cartel is often blamed for the oil price hikes of the 1970's.  The
late Lynn Turgeon argued that the devaluation of the dollar spurred OPEC to
tighten cartel discipline and raise prices, since OPEC's revenues were
denominated in dollars.

In Bastard Keynesianism (1996), at p. 26, Turgeon suggested that the rise in
speculative finance led to exchange rate fluctuations, changes in commodity
prices, and deterioration in the terms of trade of developing countries.

Today the dollar is strong (for now) and oil prices have surged, giving a
windfall to OPEC and other countries.  The U.S. probably produces less oil
and is also more dependent on foreign oil than ever before, and I suspect
that Russian oil production is way below what it was during the old Soviet
Union, and that Iraqi production is also way down compared with a decade
ago.