How much does Opec matter? This might appear a strange question to ask of the 12 countries who jointly possess about 80 per cent of the world’s known oil reserves, but the recent volatility of the oil market suggests the club may count for less than you might think.
Since the beginning of this month, oil prices have risen from about $83 per barrel to $89 before falling back down to $82. These swings had little to do with the availability of oil on the physical market and everything to do with speculative trading on the paper market, influenced by factors like the decline of the dollar and the Irish debt crisis. Opec has been little more than a bystander during this month’s rollercoaster ride.