Unlike other products, the price of oil is not determined by the demand and supply that is available on the market. The price is usually controlled by OPEC. This organization achieves this prospect by determining the amount of oil each member state should produce. The recent OPEC meeting resulted in an agreement that would see the reduction of oil production. This move is likely to have an implication on the world’s economy. Reduction in supply will result in an increase in Brent crude prices. This will result in increased inflation in the medium-term. This is to say that it could help Draghi achieve his inflation target in the Eurozone. Oil prices tend to have a sturdy correlation with inflation in the medium-term. This correlation strengthened during the global crisis.
Do you need an Original High Quality Academic Custom Essay?