This paper investigates how far OPEC influences world oil markets. We ask the question: What is the impact of the decisions of the OPEC Conference, the supreme authority of the Organization of Petroleum Exporting Countries, on world oil prices? Extracting the Conference’s decisions from the communiques of fifty meetings from 1984-2001, these decisions were compared with the subsequent market developments. The result is that this impact is weak at best, and if at all then restricted to meetings recommending a price increase. However, the opposite claim (found in the literature) - the Conference is simply following the market - was also not supported either. Another interesting observation is the little autocorrelation between the decisions of the Conference. This suggests that the ministers’ decisions accommodate quickly and efficiently recent events.
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