As winters had approached US, the cold climate is giving rise to demand of oil as well its price. Oil is used as a major heating fuel, especially in the cold regions of U.S. Therefore when there is rise in demand and decrease in supply it is obvious the price would increase.
The main problem is that the rise in price had started before the cuts in production. OPEC members had decided to cut there production after 1st November.
In such situation there can be a big hike in oil prices. Although such rise would be normal for developed countries like U.S and others, but it will create problem for poor countries. Therefore U.S should take the matter seriously and try to maintain the rising prices by using alternate sources of energy as far as possible.
By declaring production cut, OPEC members are trying to maintain monopoly over the oil markets which will be harmful for the economy of both developed and undeveloped countries. For control of oil prices U.S should cooperate with the rest of the world.
Comments
It is absolutely not a news that as winter approaches the consumption of oil goes up in US and Europe and consequently price rises. Its a general fact known to every one.
Moreover, further cut in oil production is not seems to be on the card, it is just a coercive gimmick. If the US really wants to curb down oil prices it should better open up its own reserve, which it has intended to keep till the rest of the world runs out of oil.